How To Build A Good Credit Score

How To Build A Good Credit Score

Building a good credit score is not always as easy as you think it is.  If you have no debts or credit cards your credit score is probably not that good.  It is not just those who owe money and default on payments.  Which is why I am going to talk about how to build a good credit score.

How To Build A Good Credit Score

piggy bank

Photo by Fabian Blank on Unsplash

What is a credit score?

A credit score is a 3 digit number that defines your personal credit score and how likely you are to be accepted for credit.  This is determined by your personal credit report and how you have handled credit in the past.

This will include credit cards, store cards, personal loans, utility bills, mortgages, phone contracts. So basically anything that you make a monthly payment for.

Credit scores

  • 300-579 – Very poor
  • 580 -669 – Fair
  • 670-739 – Good
  • 740-799 – Very Good
  • 800-850 – Exceptional

You can check your credit score through various companies like Experian

Why is my credit score low?

It will be no surprise to you to find your credit score is low if you have defaulted on payments or are always late paying your bills.  But what if you always pay your bills on time, your mortgage is always paid on time and credit card is cleared every month.

You would think that your credit score would be exceptional, and surprised that it is quite low.  But why is this? Your credit report is updated every month and if you have no debt information, although on paper your score should be high there is no evidence of any credit history.

How can I increase my credit score?

Pay your bills on time

When lenders review your credit report and request a credit score for you, they are looking to see how reliable you are in paying your bills, as this will give them an insite into how reliable you will be in repaying in the future. Paying your bills late or an amount for less than was originally agreed to pay can negatively affect your credit score.

Pay off debt and keep credit card balances low

Keeping your credit card balance low, will show lenders that you are responsible with credit and do not max out your credit cards each month.

Only apply for credit when needed

Only apply for credit when needed, for example if you are looking for a personal loan through cashlady, sunny or peachy, only apply as and when you need to.  Applying to numerous companies will have a negative effect on your credit score.  As each time you make an application that is registered on your credit file.

Do not close unused credit cards

If you have a credit card you no longer use or have just cleared the balance. Do not close it down even if you have no plans to use it (as long as it does not cost you an annual fee).

Always remember your credit score is personal to you. Always think carefully before taking out any credit or joint credit with someone else as this can affect your score.

How To Build A Good Credit Score

How To Build A Good Credit Score

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    1. credit score building is not easy, even if you think you should have a perfect credit score by not using credit, firms need to see you are responsible

  1. Having a good score is so important — it determines so many things from car insurance rates to mortgage interest rates. You offer some great tips for improving one’s score.

  2. Its true that it might not be easy to keep the credit score in great shape. You never know when you might get the unexpected situations shaking your bank account.. Thank you for sharing these useful tips..

    1. I think at times everyone has a blip and to me it is a good way to show that you do sort the blip out and get back on track and not bury your head in the sand

  3. I think credit is the most terrible thing invented! I wish we weren’t judged in such. I have a lot of student loans and it effects me a lot!

    1. There are so many people suffering due to student loans it is sad you have to start your working life in debt

  4. Building credit is so important and not enough people know how to manage that. I am still growing mine, but I don’t use my credit, so it does not grow very quickly.

  5. Our parents taught us not to have credits ever. Just don’t buy what you dont need any you’ll do great. Spend the excess once the savings is allocated.

    1. That is what I was always taught, only spend what you can afford, but sometimes you may need a loan, mortgage or credit card and have a problem x

  6. Very interesting post. This is true having a good credit standing is very important you’ll never know when you will need it. Thanks for sharing.

    1. It is very true and never having credit or an overdraft etc can also give you a low credit sore as there is no history x

  7. I didn’t know much about credit in the first place but this post has been really helpful to me! And the tips are great advice! I will share this amongst my fellow graduates – we are bound to need it soon!

    1. I am glad it has been helpful, I used to work in banking so know how easy it is to have problems with your credit score

  8. These are great tips on how to have or to maintain of having a good credit score. I know this will be a great help to those people who are experiencing problem with their credit score, I know someone who does and I will share it wit him.

  9. I’ve always wondered what a credit score actually is, I think we have it here in Italy as well but I don’t hear about it very often, I’ll have to look what mine is and follow your tips! Thanks for sharing!

  10. This is an interesting topic to share, very nicely done. I did have Credit cards before but I don’t want to keep on paying for the annual fees without using it so I have it cut. I don’t know what my credit score is but hopefully, it’ll be good, without having any credit card. Thanks for sharing.

  11. Great information here. I need to keep an eye on my credit score. It is important to keep an eye on it for credit reasons.

  12. This is a great post, very informative for everyone but especially young adults who are trying to build their credit! It took me a while to figure out how to fix my credit after some poor choices I made when I was younger and given my first credit card. All these tips are very helpful.

  13. Very educative post. I personally do not use credit cards or even apply for loan of any kind. I like to work with what I have but this is a must read for those who have credit cards.

  14. These are all good tips. Keeping your credit straight matters a lot. There are so many ways you need it that you don’t even know until your credit goes awry (and then it’s too late).

  15. Most people forget that paying bills in time can help build your credit score. Well, it is as important as fixing debts too. But wait…I love the tip on not closing your credit card. One more tip learnt!

    1. A lot of people do not understand the importance of paying bills ontime. I am so glad I have given you a new little tip you were not aware of

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