When you were younger, your credit rating was something that you probably never even gave the slightest thought to, and what’s more, you probably considered it to be a “future you” problem.
However, whether you want to take out a mobile phone contract or buy your first property, your credit rating and overall credit history quickly become paramount. Read on to find out how to build your credit rating.
Always Pay Your Bills on Time
Firstly, even if you’re doing everything you possibly can to build your credit rating, if you have several bills or payments you’re simply missing entirely or regularly paying later than requested, your credit rating will never improve significantly.
As a general rule, from now on, if you ever miss a payment and fail to pay your arrears within thirty days of the initial request, contact the specific individual creditor as soon as possible and ask to arrange a payment plan whereby they agree not to contact the various credit bureaus.
Furthermore, if you find you’re missing payments not because you don’t have the funds but because you forget the due date, set yourself reminders both physically in your diary or on your calendar and also on your mobile phone or tablet. Focusing your time and attention on strategic financial planning for the short term will have wide-reaching, positive effects on your finances for the long term.
Only Ever Use a Secured Credit Card
Suppose your credit rating isn’t currently in the gutter, and you’re still eligible to apply for a credit card from a reputable and renowned company. In that case, this is another tried-and-tested way of building credit.
Make sure that you choose a secured credit card, which means one that’s backed by an amount of cash as a deposit that’s paid upfront, meaning that the credit limit allowed on the card is the same as the amount of money deposited.
Secured credit cards have a clause stating that positive repayments are to be reported back to all three of the major US credit bureaus, and it would also be pertinent to note that results will only start to appear after several months of timely repayments.
Dispute Any Errors in Your Report
These days, there are plenty of applications that you can download for free to your smartphone or tablet, which will give you an up-to-date, detailed review of your credit score, and it would be to your advantage to download at least one.
Additionally, once you can see the errors and issues on your report for yourself and the individual payments that are responsible for reducing your score, you can also identify any that you believe are incorrect.
If you identify what you believe to be an error, make sure you take the time to report the dispute to each of the three major American credit bureaus, and if you turn out to be right, your overall score will be positively impacted as a result.
In general, each of the credit bureaus states that they’ll investigate the claim and come to a decision within a thirty-day period, making disputing errors one of the speedier ways to increase your credit rating.
