Having a good credit score can improve your life in many different ways. Have a look below to see five tips you can use to cut costs and give your credit score a boost.
1.Write and Stick to a Budget
It’s important to write a budget and stick to it if you want to cut your costs and keep them low. Start by writing down your monthly income and expenses, then find any expenses you can minimize or do away with. Save the excess amount and make this a habit, and over time, you will raise your credit score. Every year, the average American household spends $1,945 on appliances, lighting, electronics, heating, and cooling. If you can whittle down unnecessary expenditure and leave just the basics, you will soon become a master of budgeting.
2. Keep A Low Credit Utilization Ratio
To build your credit, you should make sure you keep your credit utilization ratio under 30%. This ratio is arrived at by looking at how much of the credit you have available is utilized. For example, if your credit cards have a value of $10,000 and the total balance that’s due on these cards is $5,000, then your credit utilization has a ratio of 50%. To ensure that your credit utilization ratio remains under 30%, either reduce your spending or request to have your credit limit increased.
3. Pay Bills Promptly
Since 35% of your credit score is based on how fast you pay your bills, it’s easy to see how paying the bills promptly can help you increase your credit score. Pay your credit card every single month after you’ve used it, as doing this will help you get a history of responsible use of credit. You will also save on interest if you pay your credit cards in full each month, and this is money that you can put to use elsewhere. Do this for all your other bills, and when you get into this habit you will soon be able to easily manage your bills.
4. Track Your Progress
It’s important to know what you’re doing so that you can be sure your actions are having the results you want them to. If you want, you can find a service provider online who will let you review your full credit report. They may also let you track any changes to your score for free, and this will give you important insights. You could also check your credit score for free with some credit card companies, but note that this score may differ from that provided by credit reporting agencies. It’s good to do all the checks you can at the start and make comparisons, and if you notice any discrepancies, immediately report them to the credit reporting agencies so they can be corrected.
5. Pay Your Mortgage
Finally, service your mortgage and look for ways to pay it off completely. This will not only help you improve your credit score, but it will also afford you peace of mind as you will know that having a roof over your head is guaranteed. One out of every 200 homes is set to be foreclosed upon, so it’s important to ensure that yours is not also at risk of foreclosure. Don’t ignore any area of your life when you’re working to improve your credit score, as an all-rounded effort and improvement will make it easier for you to get back good credit.
These five tricks should help you cut costs and improve your credit score, and start to live a satisfactory life that’s not restricted by poor credit!