A good credit history means good rates on loans and other credit facilities. Once damaged though, rebuilding your credit can be difficult. However, you can get started by using our secured credit card strategies that is easier to acquire than most other lines of credit. In this post, we shall look at how to increase your credit score.

How to Increase Your Score

1) Only use what you can settle monthly
A secured credit card allows you to show lenders that you can be financially responsible. The easiest way of doing this is by making small purchases and settling your bills in full by the end of every month. In doing so, your payment history, which accounts for 35% of your FICO Score, improves.

Additionally, whenever possible, pay more than the required minimum to ensure that your balance remains low. The reason being, beyond showing that you can handle your finances properly, your credit utilization ratio (CUR) will reduce. 30% of your credit score is derived from this ratio, which is calculated as your debt divided by your credit limit. Also, by being timely with your payments and paying over the minimum, you keep off from paying hefty interests on your credit purchases.

2) Only use what you can settle monthly
Your lenders continually send your financial reports periodically to the three credit bureaus; TransUnion, Equifax, and Experian.

However, financial institutions and lenders are not obligated to inform you when they send your report. So, you could be making payments at the end of the month while they submit reports mid-month. As such, your credit repayment record may be affected negatively.

Keep this effect at a minimum by making multiple payments in the course of the month. This will ensure that your balance is strategically low.

3)Go for a low interest Secured credit card
Building credit starts with striving to repay what you owe. This can be hampered by getting a card with high-interest rates. Make meeting your card obligations easy by shopping for a card with low interest.

4)Choose the right card
None of the above will work if your card issuer does not report card activities to the credit bureaus. What you need to understand is that unlike other savings accounts or debit accounts, not all secured credit card issuers submit reports. So, before you apply for a card, ensure that your account usage will be reported.

The Bottomline

We can present you with a new chance to grow your credit. The trick is in shopping for the best deals and using the card diligently: Do not max out the card, carry a balance, or get more cards than you can manage.

If you're struggling to get something fixed, you can fill out our enquiry form for help.