In today’s world, three numbers account for your reliability—your credit score. It’s not as extreme as the dystopian future that Black Mirror depicts in one of their episodes, but these three numbers determine if you can get a home, car, or sometimes even a job. If your number makes you feel you’re swimming upstream, you can utilize the best hacks that help build a credit score to get on the right track.
Installment loans
Interest rates are where credit card companies make their money, so take power away from them. Most cards have interest rates over 20 percent, putting you in financial quicksand that may take decades to solve. Although it’s the definition of irony, the best way to fix your problem is to take out another line of credit with a debt consolidation loan. These types of loans allow you to pay off your high-interest loans at a fixed monthly rate. Guarantee that your consolidation loan’s interest rate is lower than your credit cards before you commit, or else it isn’t worth it.
Utilization
Your credit utilization accounts for a chunk of your credit score, which is why you need to make it work to your advantage. An installment loan is an excellent asset for this predicament because paying off your credit cards in a lump sum makes the utilization 0 percent. If you try to do this without debt consolidation, it’s vital to keep your balances under 25 percent of the limit. Mastering your credit utilization will shoot that score to the moon.
Mortgage
Having a mortgage on your credit report shows you’re a viable option for loan companies. For example, proving a solid credit score to hard money lenders can positively affect your interest rate for future investments or real estate purchases.
Remove Negative Items
Most negative remarks on a credit report have a shelf life. You can try to handle this yourself or hire someone who specializes in working with credit card companies to get those remarks removed from your record. Don’t overlook these comments because they can damage future inquires severely, so look for them on your credit report.
Limit Inquiries
If a lender sees you applied for multiple credit cards, received a personal loan, and recently purchased a home or car, they’ll be a little hesitant about giving you any money. Furthermore, all these inquiries will bury your improved credit score. Try not to overdo it by spreading out your loan requests.
The best hacks that help build a credit score allow you ample opportunities for your future. Effectively improving your credit score may let you move on to more ambitious endeavors, like investing in real estate, starting a business, or buying your dream home. So good luck on making those three numbers work for you!
