There are fewer feelings in life which are more embarrassing than standing at the cashier counter only to have your credit application declined. While you may have thought that there nothing you could do to improve your chance next time and simply ignored it, the reality of the situation is that there is much that you can do to improve your credit score.
Below are some easy to follow tips to help you to improve your credit score and your creditworthiness.
See Where You Are At
The first thing that you will need to do is to take note of exactly what your financial position looks like. The best way to do this is to create a simple budget which shows you all of your monthly income streams against all of your monthly expenses. If you have any services which invoice you quarterly, apportion them into monthly installments.
Now that you have in front of you, you can easily see where all of your money is going and plug any leaks, such as late fees caused by a simple direct debit issue.
Time to Create a Realistic Budget
Now it’s time to turn this information into a working monthly budget which you can easily stick to. The key term is one that you can easily stick to. Why? Because how consistently you can save plays a role in your credit score. By putting a small amount away each month you can both reduce your debt and improve your credit score.
However, this only works if you stick to your budget. And the easiest way to blow out your budget is to get for allowing for entertainment and social activities. The best way to combat this is a two-pronged approach.
- The first is to set aside an amount each month for your shopping or entertainment allowance.
- The second is to purchase your items up front. For example, if you love the movies and online shopping, at the start of the month, purchase a coupon from the Groupon Coupons page for Johnston & Murphy along with some general admission movie tickets, and you have everything set for the month ahead and you can focus on saving.
Consolidate Your Small Debts
When you are looking at your budget, if you can see that you are only able to make the minimum payment against a range of store and credit cards, then you could benefit from a debt consolidation loan.
These work by transferring all of your existing debt to one large debt. While this might seem overwhelming, in reality, it is very reassuring because you can visualize your total debt and see is reduce each month as you make effective payments against it, instead of simply just paying off the individual amounts of interest.
Getting your financial situation to a better place isn’t something which you can do overnight, or even in a month, so be sure to stick with the tips above and enjoy an improved credit score.