Your credit score is the pillar of your financial standing and it can either be one of your greatest financial assets or it can prove to be harmful to you and your financial endeavors if not taken care of.
So, let’s say you are just starting to figure out what it means to live financially independent of your parents, buying your first car, finding someplace new to live, etc. Or you did not have good habits when it came to your finances. If you’re reading this then good! That means that you’re aware of the importance of good financial habits and that you’re looking to educate yourself and build better financial habits for your future self!
For you to make these financial changes, you are going to need some finance 101 education to know what a credit score is, how it affects you, and where you can find help to improve it and your financial standing.
What Exactly is a Credit Score?
Long story short, your credit score is essentially a fancy mathematical number that represents how trustworthy and responsible your payment history is. Your personal credit/payment history largely influences your overall credit score.
The higher your credit score, the more likely you will be able to get approved for car loans, mortgage loans, etc.
Okay, so now that we’ve got a basic understanding of what your credit score is, let’s talk about what you can do to improve your credit score and increase your financial reputation.
How Can I Improve My Credit Score?
Improving your credit score might seem impossible, especially if you’re trying to recover from challenging financial scars. Although you don’t need to worry or overthink! If you’re willing to read this article, follow these steps and dedicate some time and discipline, we guarantee your credit score will recover and improve with time
Always pay your bills on time
Debt consolidation is one of the most common uses of instant online cash loans. You can apply for a loan online in Canada and use it to pay off other debts such as credit cards and bank loans. As a result, you’ll be able to clear off your old long-lasting loans all at once.
Online cash loans come with small installments, so repaying their amount will be relatively easier for you. As a result, if you have taken a loan with high-interest rates, you should choose this option and clear them easily.
Create a monthly budget and stick to it
List out all your monthly income and expenses and create a budget based on where you know your money comes from and where it’s going. This monthly practice will not only help you increase your credit score but will also help you to develop better money habits.
Know where to start with your debts
Make a list of all your debt from the least amount to the greatest amount. Now that you have a budget and you know where your money goes, take any extra money leftover and focus on paying off your smaller debts first then take that extra money and use it to pay off bigger debts one at a time.
Follow the 30% rule
Never use more than 30% of your credit limit. By doing this you can ensure it’s always at a manageable amount and it doesn’t make you look like you are abusing your open lines of credit.
Pay off your credit cards
If it’s within your means to do so, always pay off your credit card every month. This will keep it from getting too high and you don’t end up paying high-interest rates on it. And if you can’t do this, just stick to the Snowball Method mentioned above.
Note that oftentimes, applying for a personal loan can help you spring back into action when it comes to restructuring your financial situation. If you’re looking for a helping hand to guide you through some rough financial times, look no further! You can learn how to apply for an instant online loan with PrestoCash.
Keep in mind that building good financial habits and keeping them on track is the key to freeing yourself from a life of debts.