How to Make the Most of Your Credit in 2021
Your credit score is a critical component that influences your borrowing power. If you’re taking out loans, it helps prospective lenders to decide the amount of your loan, interest rate and other terms that they will offer you.
If you are wondering how to improve your credit score in 2021, think smart and try these several things to boost it or maintain its good standing.
Pay on time: Whether it’s your gas and electricity bills, your rent or mortgage repayments or your credit card, make sure you pay them all on time. If you are finding your bills hard to keep track of, why not set up a reminder in your calendar, or alternatively set up direct debits.
Reduce your credit card limit, and pay it off in full each month (or at least more than the minimum requirement).
Reduce the number of credit applications you make, as each application (even if it’s successful), can lower your score as it may indicate you are under credit stress. You need to think very carefully before applying for new credit.
Don’t always close your accounts: Having accounts open without any negative reports can improve your credit rating, so it can be worthwhile keeping credit card accounts open even after they have been paid off.
Create a savings buffer: It’s always a good idea to put some money aside for a rainy day. As much as you try and plan, there’s always the possibility of unforeseen expenses popping up such as unexpected medical bills or emergency car repairs. If you have some savings put aside, you will be less likely to get behind on your repayments when the unexpected happens.
If you do have a low credit score, the good news is that it can gradually get by following these suggested ways. A good credit score may not happen overnight, but if you’re prepared to put the effort in, it should improve over time!
How to make the most of having a high credit score
Having a good credit card rating or credit score can be used to your advantage. Your score will indicate an excellent, very good, good, average or below-average rating. Here are some potential benefits of having a high credit score.
Higher borrowing limit: Banks and other lenders are likely to be willing to lend you more money if you have a high credit score as you have a track record of meeting repayments. Make sure you only borrow as much money as you can comfortably afford to pay though!
More negotiating power on interest rates: Your credit score is often one of the factors lenders take into consideration when determining your interest rate, so it may help you to negotiate a better deal on your interest rate than you would get otherwise.
More likely to get your loan approved: Although you will improve your chances of getting a loan approved if you have a good credit rating, there are no guarantees as the lender will also consider other factors such as the amount of money you are wanting to borrow and your current financial situation.
If you are in the market for a new credit card or personal loan, MONEYME offers low rate personal loans up to $50,000 and a low rate virtual credit card up to $20,000 with interest-free terms. When considering your loan or credit card application, MONEYME doesn’t just look at your credit score but we take in other factors such as living expenses, employment history and income.
Enquire today about MONEYME’s credit cards and personal loans – it’s never too late to make the most of your finance this year!