Do you want to increase your credit score and do not know how? Have you ever had a credit application denied and do you think the reason is low credit score?
To get easier, first of all, you need to understand what credit score is and how it works. It is important to already know that raising credit score is not an easy task and requires organization and discipline.
What is credit score?
The credit score is a score that indicates the probability of paying bills on time or not. This calculation is based on your payment history and consumer behavior.
Before releasing your installment purchase order, credit card or loan, companies look for information to know how you have behaved in relation to your debts.
Companies that provide credit (shops, banks and financial institutions) and service providers (internet, pay TV, mobile and fixed telephony) refer to their score.
Each company has its own criteria and policies for granting credit or service, that is, there is no rule.
That way, you can be seen as a positive consumer, the “good payer,” or the one who shows lack of commitment, though unforeseen, such as job loss.
How does the credit score work?
When an account is overdue, companies that record their personal data and outstanding debts, such as the Credit Protection Service (SPC) and Serasa, can be triggered.
Likewise, they track when you pay your bills on time. Through systems, other companies have access to this information.
The more delays and backlogs you have, the more likely you are to have a low credit score. So if you have had any requests denied, do not be discouraged, your credit score score is not definitive.
Despite this, having a good credit score does not guarantee credit to fulfill all your desires, such as financing a car or an apartment.
Credit Score Score
In more common cases, the score of the credit score varies from 0 to 1000. The closer to 1000, the better seen you will be by the market. See the following table:
|0 to 300||high risk of default in the next 12 months|
|301 to 700||average default risk in the next 12 months|
|701 to 1000||low default risk in the next 12 months|
Is it possible to increase the credit score?
Yes, the credit score score has changes according to your consumer behavior. This process may take a while because you need to follow it for a few months to find out how you organize when it comes to paying bills.
How long does it take to increase the credit score? There is no exact answer to this question. It all depends on how you approach the problem.
Get started today to have positive attitudes if you want to increase your score faster. And see the following tips.
How to increase credit score?
Here are tips that help you improve your score and make it easier for you to get credit when you need it.
1) Negotiate your debts and clear your name
The first step to improving your credit score is to pay off all your outstanding debts and clear your name.
It’s time to face reality and seek the right solution to solve the problem: direct negotiation with the lender.
Only in this way is it possible to change the way the market analyzes your profile. Beware of companies that promise to clear your name or increase your credit score, as this is a scam.
To avoid falling into a trap, seek guidance from credit protection agencies. Ideally, you should pay all your debts in cash to get discounts. But if that is not possible, negotiate with installments that fit in your pocket.
If you have paid your debts and still continue with the low score, you have a reason. The credit score reflects the behavior of a consumer group with a similar profile, that is, no one will be judged by what they have just done.
The more recent your debt or negativity, the longer it will take to recover your credit score.
This means that even after clearing your name, your credit history or late payments continue to impact your credit score.
Therefore, regularize the situation as soon as possible and comply with the agreement with the lenders, to increase the credit score over time.
2) Pay your bills to maturity
Pay your bills by the due date to be able to increase your credit score faster. Try not to delay the payment of any debt.
Whenever possible, pay before the due date. This attitude is well regarded by the credit bureaus and their credit score scores tend to rise. Of course, if you forget, the important thing is to make the payment as soon as possible.
Automatic debit is a simple way to not miss any payments that most service providers offer.
An alternative is to include in the calendar of the cell phone and choose the option “alert”, so you will be warned. In that case, add all the necessary alerts for the month.
3) Update your data and make the Positive Registration
To improve your credit score, update your data on credit protection agencies. The more up-to-date the information provided, such as address, telephone and referrals (bank, card administrator, among others), the greater the possibility of increasing the credit score.
You can also avail to perform your Positive Registration, which functions as a financial curriculum. The Positive Registry records information about its financial attitudes, such as payment of bills, financing and loans.
With this, your financial history can be consulted by companies and you can get credit more easily if you are a good payer, of course.
4) Turn multiple debts into one
After renegotiating debts, starting to pay installments and having your name cleared, you can turn multiple debts into one.
Good alternative is to choose a personal loan with installments that fit in your pocket and anticipate the repayment of your debts.
In addition to lowering your total debt and paying less interest, you will not have to worry about paying multiple bills in the month.
With the maturity on a single date, it is simpler if you schedule for the payment and also reduce the possibility of forgetting. It is a smart move that can increase your credit score in no time.
Now that you already know the amount you need for personal loan, keep in mind how much you can afford, according to your income and total expenses.
Do not forget that the portion of the personal loan can not jeopardize the payment of essential expenses such as electricity bill and water. Only then will you be able to keep your accounts up to date without fuss and help increase your credit score. Good right?
Credit score: what are the main myths?
|CPF on the invoice increases the score.||MYTH|
|The higher the income, the higher the score.||MYTH|
|Checking the score decreases your score.||MYTH|
How do I apply for my personal loan?
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