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Credit ratings are sometimes referred to as credit scores or FICO scores. A credit rating is a number that’s used to show your creditworthiness concerning a particular debt, financial obligation, or in general terms. Credit ratings are assigned to individuals, corporations, states, sovereign governments, or provincial authorities.

Credit rating for individuals is evaluated by credit bureaus using a three-digit numerical scale. This numerical scale ranges between 300 and 850.

In case you’ve had a previous loan and you lowered your credit score because you were unable to meet your financial obligation in time, all is not lost. You can begin working on improving your credit rating today. Read the following ways that can help you raise your credit score:

1. Debt Consolidation

What is debt consolidation? Debt consolidation refers to putting together several debts into a single repayment plan which reflects the total amount. So, instead of paying many different debts each month, you pay one affordable payment covering all your debts. You may opt for debt consolidation by securing a debt consolidation loan.

Once the loan has been approved, the funds you receive will clear all the multiples loans. Through this approach, you'll only have to concentrate on paying one creditor. The advantage of getting a debt consolidation loan is that the creditor offers you a lower interest rate or a lower payment amount for each month, unlike your older debts.

Because of the ease to repay the consolidation loan, future lenders can easily approve your loans. Debt consolidation will improve your history and standing because the struggle to repay is removed. The high interest rates of your previous loans are no longer there to affect your credit rating.

2. Build Your Credit File

Open new accounts that can be reflected in the major credit bureaus to which other card issuers and lenders report to. You can’t have a good track record in borrowing without having some accounts under your name. Therefore, ensure that you have several accounts open and active.

You can achieve this with secured cards and credit-builder loans if you’re a starter or if you have a low credit rating. If you’ve got an existing good score, a rewards credit card that has no annual fee will be great for you. You may also be added as an authorized user in another person's credit card, but make sure that they’re using their card responsibly. Many people wonder how to build wealth but the secret is to use sensible debt to acquire assets that will appreciate in value over time.

Lastly, you can register for Experian Boost and add your phone bills, positive utility, and payments for streaming services. They get reflected in your Experian credit score.

3. Promptly Honour Your Payments

Your history of how you've been honouring your payments plays a major role in establishing your credit score. On-time payments over a long period give you an excellent credit rating. You shouldn’t default paying your credit card or loan beyond 29 days. Payments that are late by 30 days or more may be reported to credit bureaus which harms your credit ratings.

To avoid missing any payment, have an automated mode of payment for your minimum amount and make sure that you don’t overdraft your account. When you’re experiencing problems in paying any instalment, contact your credit card company and negotiate hardship relief.

4. Settle Past-Due Accounts

Update all bills that are still behind in payments. Late payment may stay on your report for seven years. However, paying your bills regardless of being late can help in improving your credit rating. It protects you from additional late payments in your history and the surcharge fees.

If you’re experiencing challenges paying your credit card debt, you can seek advice from a credit counsellor and enrol in a debt management plan (DMP). Your counsellor may negotiate lower interest rates and payments for you, which may help bring your accounts to date.

5. Limit New Accounts Application

Though you may desire to open more accounts for credit file building, ensure these applications are limited. Every application may attract a hard inquiry and may slightly affect your credit scores negatively. New accounts lower the average age of your accounts, which is undesirable.

Even though account average age and inquiries have minor scoring effects, caution is key as you seek to make more applications.


Being aware of your credit rating is important to know where you stand and keep watch of your progress. This way, you can always check your FICO score. The report and breakdown you receive will show the areas that may be hurting your credit score. With this in hand, you can focus on those areas and improve your rating. Each month your credit score is automatically updated and tracked so be keen to check it.

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