Credit Score Tips

As any business owner would know, your credit score is a very important factor that can determine if funders can provide you with credit.

It’s simple really – the better your score, the easier you will find it to be approved for new loans or lines of credit.

Here are our
top 4 tips to help increase your credit score, and keep it clean:

Pay bills on time:
 Payment history is the single biggest factor that affects credit scores. Ensure you pay all your credit cards and loans on time. Setting up due-date alerts or automatic bill payments from your bank account are very effective ways of paying your debts on time. On the flip side, if you miss your repayments, this can also be recorded and can have a negative impact.

Have a credit card:
 Oddly, having no debt at all doesn’t make you more creditworthy. In fact, keeping hold of credit cards that you can manage, and paying them off each month is actually beneficial. This helps demonstrate a positive repayment history and improve your credit score. Remember that you don’t need to have a credit card to establish a credit history.

Credit utilisation:
 The simplest way to keep your credit utilisation in check is to pay your credit card balances in full each month. If you can’t always do that, a good rule of thumb is keeping your total outstanding balance at 30% or less of your total credit limit. From there you can slowly work on bringing it down to 10% or less over time. This is considered ideal for improving your credit score.

Limit your request for new credit:
 New credit applications account for 10% of your score. Each time you apply for credit that prompts a hard inquiry into your report, your score will take a hit. Unless it’s absolutely necessary, don’t apply for new credit cards or loans if you want to keep your score up. One application for a credit card is not likely to hurt your score, but making multiple applications in a short period of time probably will.

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