As we always say and hear: “desperate times call for desperate measures”. Unfortunately, this is true, especially if a person is deep in debt and are looking for ways to improve their credit score. Sure, trying old-fashioned ways such as paying your bills on time and never missing a payment would definitely work, but still, credit scores are tricky and may need a lot of work.
It can get tiring to wait for your credit score to improve, and thus we are giving you extreme ways to turn your credit score from negative to positive.
Open New Credit Card Accounts
Credit cards increase the available credits, so it is always good to open new credit card accounts. Credit utilization is a huge part of your credit score, so opening a few more accounts will increase the total amount of your credit. However, one thing that you must not do when you opt for this solution is use those newly opened credit cards. Acquiring more debt will only lower your credit score, and you definitely do not want that. Keep your cards somewhere you cannot see and use them, and avoid bringing them with you when shopping around to avoid being tempted.
Ask a Friend or Relative for a Favour
If you have a relative or a close friend who would be willing to add you to their credit card account, then that would be a big help. This method would be useful to students or those who are just starting out and has no existing credit. To further earn their trust, you should offer to put the agreement in writing. Include how much your threshold will be, and how you are planning on to pay for your bills. This writing would be the equivalent of a contract, and would serve as a bind between you two. Lastly, you should always remember to use the card wisely, especially since you are asking for a huge favour from a friend or a relative. You wouldn't want to lose their trust, would you?
Get a Car Finance
If you are planning on getting a new car finance anyway and you are sure you will be able to pay for it, then go ahead and do that. This will increase your credit score instantly, you just have to make sure that you will pay for it before the due date comes. According to a credible source, 10 percent of your credit score comes from the different types of credit that you use. It will be based on your credit card usage, installment loans, finance company accounts, mortgage loans, and retail accounts.
Increase your Credit Limit
Ask your creditor if you can increase your credit limit and if he says yes, then go ahead and do it. Increasing your credit limit helps in boosting your credit score, however, you must be very careful and responsible not to overspend using your card.
These are just a few ways to increase your credit score, and there are many, many more. The best way to discover them is, of course, through experience and knowledge. Knowing what your credit report is and how that affects future lending decisions is the key to building a strong financial position.
At Alpha Car Finance, we work with Australians who have tried unsuccessfully to get finance, or a personal loan with the traditional lenders. Because we look at your current situation rather than your history, we are able to review and approve applications that were declined elsewhere. Sure, our pricing model is higher than the banks, and that is because we are taking the risk that you can meet all your repayments. If you do this, across the entire finance term, then you will see significant improvements in your credit score, and your ability to access main stream finance will return.
Need a car? We have more than 700 late-model vehicles available for finance right now. Talk to us on 1300 74 25 76, or apply here.