No matter you are applying the loan to buy car, buy house or applying a personal loan, you shall not ignore your personal credit score and even underestimate its power as if you having a very low/ bad credit score, your loan application will be rejected for sure or you can’t get the financing that you expected. While, if you think you lucky enough that the bank approved your loan application, but you are unable to enjoy some terms such as low interest rate, long loan tenure, higher loan amount and etc like others who having the great credit score.
Don’t be fret, its not too late to turn your credit score into positive, at least you know your credit score before taking any loans. In fact, it is not so difficult to improve your credit score but it doesn’t happen overnight and as long as you are following the tips that we given to you as follows;
1. Have a steady job
Yes, first thing you need to do is find a steady job with a steady monthly income, it would significantly improve your credit score. A steady source of income signifies that you are having a low possibility to miss your loan repayment, which means you are a less risky borrower to the bank. The bank will check a borrower credit score to determine whether they are risky borrower.
2. Pay your utilities bills/ debts on time
This is very important to pay your bills on time as it will affect your personal credit score. Banks like to review the borrowers credit history through Central Credit Reference Information System (CCRIS) to know whether they have pay their existing bills and loans e.g. utilities bills, credit card bills, phone bills, car loans, personal loans or any bills or loans that under the borrower’s name on time.
If you have any late payments, sorry to tell you that your loan application is most likely to be rejected by the bank.
3. Reduce your debts
In order to improve your credit score, you should not only focus on whether you have repayment of your debts on time, instead, you should one shot to clear-off the outstanding balances on your debts. It is very helpful to reduce the number of credit cards and debt accounts that you own or under your name. The bank will check the number of your debt obligations to consider whether approve or reject your loan application.
4. Own some assets
This is very helpful on your credit score if you own some assets. The bank will view assets such as saving deposits, stock market, properties as a signal of your financial well-being.
If you own some assets, your credit score would improve. Banks view assets such as investment properties and saving deposits as a signal of your financial freedom.
5. Be a loyal customer of the bank
Banks are treat their loyal clients better. Having a long credit history with a specific bank will increase your credit score with the bank. But, if you can save a lot of money by switching banks, you should probably do so.
If you follow these tips, you will see there is improvement on your credit score after few months and keep going until your credit score turn to positive and you are good to go to apply any loans that you wanted. Good Luck!