Many people make resolutions at the beginning of the new year. One of the most common topics for New Year’s resolutions is finances. If you have a low credit score, a worthwhile resolution is to build better credit. Your credit score is important in many aspects of your life. It can impact your ability to get a car loan, a mortgage, an apartment, and can also impact what you pay for things like car insurance. There are some proactive steps you can take to improve your credit over time.
Make Your Current Payments on Time
One of the factors that can have the biggest negative impact on your credit score is making late payments or missing payments completely. If you are late on a payment or miss a payment to one of your creditors, the creditor will report it to the credit bureaus. Paying all of your bills on time – or within the grace period – will help you avoid any more negative dings to your credit.
Use Installment Loans to Build Credit
There are two ways that you can use installment loans to build credit. One is to get a small installment loan and use the money to avoid missing a payment on one of your other loans. This can be used to bridge the gap during a week or month when things feel tight. The second option is to get an installment loan and pay it back on time. Taking out a loan and paying on it regularly is a way to improve your credit score over time.
Clean Up Old Debts
Another way to build better credit is to clean up old debts. If you have debts that you have not paid for a while, those debts may be impacting your credit every month. You need to address those debts in order to stop the creditors from sending negative information to the credit bureaus. You can do this by contacting the creditors and asking to set up a plan for repayment. In some situations, the creditor is willing to set up a payment plan that works for you or even reduce the amount you owe if you are able to make a lump-sum payment. If you can get a major discount by paying a lump sum, consider getting an installment loan to pay the lump sum and take advantage of the discount.
Tio Rico offers personal loans up to $1,000 that you can use to put toward bills in order to protect your credit – even if you do not have the title for your car. You can have cash in hand in as little as thirty minutes. Apply online to get started on the process of getting a flexible personal loan to help you in your efforts to improve your credit.