A strong credit score is always the key for financial stability and getting best loan options. Understanding how credit works is all it required to secure a personal loan or get a credit card with excellent perks.
In this article, we explore how credit works and how to improve the credit score to secure the best loan options.
Understanding Your Credit Score
Credit Score is not a three-digit score, but it is a measure to calculate your worthiness for a credit.
It is calculated based on various factors which include Payment History (35%), Credit Utilization (30%), Credit Age (15%), Credit Mix (10%) and New Credit Inquiries (10%).
Maintaining a healthy score and a green history is the key to make sure your credit score remains high which helps you to pass any credit checks for loans.
Simple Steps to Boost Your Credit Score
You can follow the below listed simple steps to boost your credit score in a high speed:
- Pay all the bills on time.
- Reduce credit card balances, try to use less than 30% of your credit card balances.
- Never close old accounts to maintain a solid history of credit.
- Check your credit report annually and challenge inaccuracies.
- Apply for lower credits that do not include unnecessary loans.
Benefits of a High Credit Score
Having a high credit score is always beneficial. It increases your creditworthiness and helps you in easier loan approvals and with lower interest rates. It also helps in higher credit limits and you’ll have an increased negotiation power while taking credits.
Finding the Best Loans
Maintaining a high credit scores comes all the way to finding the best loans for yourself.
If you’re planning to close a loan deal, consider the following options:
- Personal Loan: SoFi, Marcus by Goldman Sachs
- Mortgages: Better.com
- Credit Cards for Building Credits: Discover it® Secured Credit Card
- Peer-to-Peer Loans: Prosper
- Auto Loans: LightStream
Maintaining a Healthy Credit Score
You can maintain a healthy credit score following the following ways:
- Monitor your credit score regularly with apps like Credit Karma or Mint.
- Merge higher interest debt into a lower interest rate single loan.
- Negotiate with creditors.
Conclusion
Maintaining a high credit score is always a good idea which will help you in any hard financial situation. By adopting smart credit habits you can increase your credit score quickly and make sure to find the best loan options.