A good credit score can unlock many possibilities in your life, making it easier for you to secure a loan, rent an apartment, or start a business. However, according to a recent survey conducted by LendEDU, about 25 percent of millennials do not know what a credit score is. A total of 500 people aged 17 to 37 participated in the poll, which tested their credit score knowledge.
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Your credit score might just be a few numbers on a screen, but it can determine a surprising amount of factors in your life. For example, did you know the following can – and do – check your credit score?
Are you struggling with your credit rating? Perhaps it’s too low and needs fixing? Then have a read of this advice to help repair your credit:
Reduce Debt
One of the main reasons that your credit rating is so low is because you’re in debt. Debt is the cause of so many financial problems. So, if debt makes your credit rating bad, surely no debt makes it good, right? Yes, that is exactly right, you need to get out of debt. Or, at the very least, try and reduce some of the debt you have. Get to work on paying off your debt, try and get rid of as much as possible. Stop using your credit card so you don’t end up in even more debt. Focus on reducing what you owe and your credit rating will soon improve.
If you want to purchase a house or car someday, one thing that you’re going to need to have is good credit. That is what sends a message to your potential loaners or creditors that you are responsible with money – that you pay your bills on time.
If you’ve made a few credit mistakes in the past and you’re curious to know about some of the things that you should do in order to establish your credit and also keep it intact, here are five tips that can help you to do just that.
Get a secured credit card. If you don’t have a credit card, there are some benefits to that. The main one being that since credit cards are basically plastic cards that come with interest, if you purchase things with cash, you decrease your chances of going into debt. So, what is the advantage of having a credit card? Well, one of the main ones is the fact that it’s one of the most effective ways to establish credit. That said, one card that you can get that will help you to use credit responsibly is a secured credit card. Being that it’s tied to your account and it has a lower limit, that will essentially help you to pay your balance on time.
Did you know that there are ways to improve your credit without the use of credit cards? Most people don’t realize this and because of that they put themselves at risk by getting multiple credit cards that they know they should not have. What you need to understand is that credit cards can often be a problem, not a solution, if they aren’t being used properly.
So, what is the best way to improve your credit without credit cards?
Get a secured loan.
Well, the best way to improve your credit without credit cards is to get a secured loan. What is a secured loan? A secured loan is one where you are backing the loan with some type of collateral. For example, a car loan would be secured, a home loan would be secured as well and a recreational vehicle loan would be secured too. The reason these are better is because you get a better rate and they don’t let you spend more on them once you have received them. Unlike credit cards, these types of loans are set, so you know exactly what you will be paying and when it will be paid off.