Have you ever stopped to think about your credit score? Turns out, it’s a pretty important number that lenders use to figure out if they can trust you with credit. It’s a three-digit summary that shows how likely you are to pay back loans. And let me tell you, having a good credit score can really work in your favor. You can get a loan with a lower interest rate and better terms. Sounds good, right?
At Sterling Bank, we want to help you improve your credit score. Here, we will give you some tips on how to do it.
Pay your bills on time
First things first, paying your bills on time is crucial. Your payment history plays a major role in determining your credit score. If you start missing payments or pay late, it’s going to take a toll on your credit. So, make it a habit to pay those bills on time, with no exceptions. To make it even easier, set up reminders or automatic payments. Trust me, it’s worth the effort.
Try to use less of your available credit
Another tip is to be mindful of how much credit you’re using. This is called credit utilization. Basically, it’s about how much of your available credit you’re actually using. To keep that credit score looking sharp, aim to use less than 30% of your credit limit. It shows you’re responsible and not maxing out your cards.
Check your credit report
Your credit report is a detailed record of your credit history. In Nigeria, you can get one free credit report per year from any registered Credit Bureau. Check your credit report regularly to make sure all the information is correct and up-to-date. If you find any mistakes, you can ask the credit bureau to fix them.
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Don’t close your old credit accounts
Here’s a little insider tip: avoid closing your old credit accounts. I know it may seem tempting, but closing them can actually harm your credit score. It shortens your credit history, which is something lenders look at. So, instead of closing them, keep those old accounts open. Every now and then, make a small purchase to keep them active. It’s a smart move to maintain a longer credit history.
Limit new credit applications
Whenever you apply for credit, it creates a hard inquiry on your credit report, which can temporarily lower your credit score. Try to limit the number of new credit applications you make to avoid hurting your credit score. Don’t go overboard, okay?
Improving your credit score takes time and effort. By following these tips, you can gradually improve your credit score and get better loan terms and interest rates. Remember to check your credit report regularly, pay your bills on time, use less of your available credit, and limit new credit applications. With time, your efforts will pay off, and you will be well on your way to achieving a good credit score.
This helps