Unlike earlier civilizations, wherein the spoken word was all that was required to carry out monetary transactions, today people need signed bonds and credit history evaluations to carry out such transactions.
There are some records that not only help the banks and financial institutions understand the financial health of an individual, also help them understand the borrower’s credibility and promptness in returning the money borrowed.
This is a score given by certain independent organizations to individuals based on their financial dealings. The loans that an individual may have taken, the credit cards he/she holds as well as the pre-payments, timely payment of installments and defaults are all taken into consideration while calculating this score. In today’s socio-economic framework, having a credit score and that too, a good one is extremely important; especially if you want to avail any financial assistance from a bank or financial institution. However, considering the stressful economic condition of the world today, maintaining a good credit score has become a challenge. This often creates a major roadblock for people in need of some financial assistance from a bank.
Having spent a few years in the loans and credits department of a reputed bank, I have seen how a bad credit score can be so troublesome. I have as such put together a few good-to-do-things, doing which can help you maintain a good credit score.
Pay up the overdue amounts:
This is perhaps the first thing that you can do to salvage your declining credit score. You can always get short term loans from institutions that offer online installment loans for bad credit. You can always borrow the overdue amount from one of these institutions, and pay up the overdue amount in order to ensure that it does not reflect badly on your credit score. You can also consolidate your debts with the money borrowed and make regular payments in order to salvage your credit score.
Keep checking your credit score:
It’s a myth that checking your credit score often might reduce the score. Most people only get to know about their credit score when they apply for a loan. And most of the times people are in for a surprise as the credit rating look quite bad even when the individual thinks that he/she does not have any defaults. Such things usually happen when certain credit card companies mistakenly report defaults on transactions which the card member may not have even done. Such things need to be disputed and rectified so that the credit score is not ruined.
Avoid hard inquiries:
When you know that you already have some defaults to sort out, try not to apply for another loan as these are considered as hard inquiries and reflect badly on the credit score. When a defaulter applies for more loans, it only puts the financers on high alert as the applicant is seen as someone with greater credit risk.
Do not close old credit cards:
Many a times, people have a tendency to just close the old credit cards once they have been paid up. However, such old credit cards with well maintained repayments can give an individual a great credit history and even boost the credit score.
People who are conscious about their credit score are nowadays taking active measures to ensure that it is going good. Whenever there are impending defaults, most people usually avail online installment loans for bad credit and try to pay up in order to avoid ruining the credit score. Most people also actively track their scores and even consolidate their debts to maintain a good credit score and the efforts surely pay up in the long run.