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In today’s world, having a good credit rating is essential for financial survival. A poor credit rating can influence your life in several different ways and make it more difficult for you to meet your financial goals in life. Bear in mind that it’s not just borrowing money such as loans and credit cards that are affected when your credit rating isn’t so great – it can stop you from doing things such as taking out a smartphone contract, buying a new car, or even signing a tenancy agreement for a new home. And, if you have hopes and dreams of being a home owner in the future, then a good credit rating is vital to get a mortgage and finally have somewhere you can call your own.

The good news is that if your credit rating has been looking a little low lately, there’s no need to worry – there are several things that you can do to help rebuild it and get it back to a perfect status. Although most of these methods will take some time and even hard work, there’s a lot that you can gain from improving your credit rating.

Read on to find out more.

Tip #1. Consolidate Your Debts

When your credit rating is determined, it’s not just about the amount of debt that you have but also the number of lenders that you are borrowing from. So, if you have a small amount of debt, such as quick loans, store cards, and credit cards, but it’s spread over a number of different financial products, this could be bringing your credit rating down.

Not only that but keeping up with repayments each month for several different lines of credit can be both tiring and confusing. If possible, you might want to consider taking out a loan or credit card that you can use to pay off all your current debts in full, leaving you with one simple and easy monthly repayment to make instead. Another benefit of doing this is that you’ll likely be paying less interest so that you can save money. And, your credit rating will benefit since your old debts will all be paid off – always a bonus. If you’re looking for a solution, these quick loans from https://www.118118money.com/quick-loans/ are perfect for the job as their APRs are more reasonable for those who have issues with their credit scores.

Tip #2. Watch Your Credit Card Spending

Credit cards can be a great financial product to have. They come in handy for emergencies and allow you to have a bit of money to spend on the essentials at the end of the month when your budget is tight as you await payday. Along with that, many credit cards today come with rewards and perks that you can use on a multitude of different things, such as collecting air-miles or getting money off your favourite products.

However, be aware that relying too heavily on your credit card can go against you when it comes to your credit rating. As a general rule of thumb, try and ensure that your credit card debt is never any more than 50% of the total balance. For example, if you have £1,000 to spend on a credit card, never owe any more than £500 at any one time. This will indicate to lenders that you’re not just a responsible borrower but also that you have enough money in the bank to eliminate the need to rely on credit all the time.

Tip #3. Pay Your Bills on Time

You might think that it’s just credit repayments that affect your credit rating. However, the truth is that there are several other things that can influence whether it goes up or down. For example, your monthly utility bills may not be borrowed, but missing payments or making payments late can affect your credit score just as much as failing to make a monthly repayment on your credit card or quick loans.

If you’re saving up for a big purchase then it can be tempting to wait before paying your bills. However, this could affect you adversely further down the line. For example, if you’re saving up for a house deposit then paying your bills late to help you save money could make it more difficult for you to get a mortgage in the future. So, make sure that your priority bills are always the first thing that you pay.

Tip #4. Borrow from Friends and Family Where Possible

Although never borrowing any money from the bank or other lenders can affect your credit rating by giving lenders no past financial history to work with when making a decision, it’s also important to understand that borrowing too much can be even more harmful. If you are lucky enough to be in a position where you’re able to borrow money from friends or relatives, if you find yourself in a sticky situation then it’s good to go with this option since money borrowed on an informal, personal basis won’t have any effect on your credit rating at all. Just remember to pay them back!

Did these tips help? We’d love to hear from you in the comments.

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