Building Your Credit Score: 3 Actions Steps to Take Now

If you’ve decided to take on the endeavor of building your credit score, then you’ve come to the right place.

It’s a full-time responsibility and it may take time to build a good credit history, but this move will be sure to open doors and better deals for you. After all, these three digits will reflect just how responsible you are with your finances. And for most of our adult lives, we will be judged and rated based on these three digits.

The Importance of Building Your Credit Score

Buying a house, taking out a business loan, getting a new car—these big-ticket purchases will likely require you to take out a loan. And if there’s one common and important requirement to successfully do so, it’s a good credit score.

Good credit history will get you much better deals and even secure that job opportunity that you’ve been wanting. Banks, lenders, and even your prospective employers take in into account when looking into your history.

So, what are some of the things that you can do to make headway in building your credit score? We have rounded up 3 tips that will help you successfully raise your credit score—keep on reading.

Tips for Building Your Credit Score

1. Always pay on time

We’ll let you in on one of the industry’s open secrets: reliability will get you that loan approved.

And if there’s any true mark of reliability, it’s a healthy credit score. Lenders and banks alike will take a look at your credit score to see if you are responsible enough to pay your bills on time. Based on your paying performance, we’ll know if you can be trusted to have good paying habits.

So, tip one in building your credit score is to take your due date seriously. Some people often fall into the trap of delaying their payments and they end up hurting their credit scores unknowingly—don’t be one of them.

2. Keep your credit ratio low

Another important habit that you need to build for better credit history is to settle your bills in full—as often as you can manage.

You see, credit card bills are likely to incur interest when not paid right away. And over time, this will reflect on your credit score.

Our tip: keep your credit ratio below 30%.

To know where you stand, consolidate all of your credit card balances. The final sum should not go over 30% of your credit limit. If it’s a little above this number, you can either request for a higher limit or double down on your efforts to pay off the remaining balance.

3. Don’t request a new credit card just yet

As tempting as it may be to start with a clean slate, hold off on the request for a new credit card.

The longer you’ve had your credit card, the better your standing will be. Closing your current credit card will cause you to lose the credit history that you have racked up from that card.

Not to mention, in the computation of your credit limit, even your unused credit cards will still be taken into consideration. This means that you’ll have better chances of staying below the 30% threshold that we mentioned earlier. Just think of it this way: If you drop one of your cards, your credit limit drops too.

Need to take out a small personal loan?

When you need a quick personal loan for that unexpected expense, LendingBear might be able to help. Apply online or give us a call to learn more about your loan options. Cash when you need it, fast and friendly!