Having a great credit rating or score has many advantages for you personally. Most people ruin their credit score because they are not careful enough when they borrow money and more so when they repay it. However, there are many methods in which you can maintain a great credit rating. Here are some helpful pointers to guide you towards having an excellent credit score.
Understand what a good credit score is
The more details you are aware of on how your credit score is made, the better you will be able to handle it. There are usually five distinct aspects of your finances that will be utilized to carry out your credit score calculations. These are; the amount of debt, your repayment history and the mix of credit you have, your credit age and the recent credit that you have incurred. However, not every single aspect of your finances will reflect badly upon your credit rating. Good examples of this are overdrafts and utility bills. They will not affect your credit score.
Make sure that you pay your bills on time
When you say bills. It does not necessarily include just the repayment of your cash loan. There are some bills such as any credit cards that you may have, where, when the installments are not paid on time, a report of this gets to the credit bureau. This is known as “cribbing”. Once this happens, your credit rating is affected negatively and this could prevent you from essentially getting any financial aid from institutions such as banks. With time if you somehow do not miss anymore payments and keep on going until the full amount has been settled, this issue will no longer be relevant, but until then you will not be able to approach an institution such as bank to borrow credit or apply for mortgages etc.
Maintain a low balance on your credit cards
Do you have many credit cards? The higher you climb up the balance ladder on your credit cards, the lower your financial credibility will fall. Therefore, your credit score will take a hit if the balance on your credit cards keep getting accumulated. In order to keep up a great credit score, ideally the balance in your credit card should be less or at the most only 30 percent of the total credit limit that you have been given. If you have a bad credit score you will not be eligible to get even a loan cash in Singapore, because even in this case you will possibly be put through a credit check.
The bottom line is that when you do not pay attention to money that you must pay off on a monthly or weekly basis, your credit rating will suffer. A bad credit rating will block you from enjoying any sort of financial assistance from a reputed organization. Therefore be mindful and use your money wisely.