To successfully have access to different credit packages an individual needs to create a commendable score. Credit score determines the credibility of a client in the eyes of potential lenders, employers and landlords and determine the risk involved in engaging the client. Credit rating is used to determine if there is any risk involved in contracting with a specific client and the extent of the risk to the lender of service provider. Ability of the client to access credit services from different sources and capacity to make repayment is the key aspect considered in rating the clients score. In this regard, it is the ability to repay for the credit advanced within the agreed terms that increase the score while failure to do so decreases the score significantly.
The first step in building a credible credit score is to have access to credit facilities. However there is need to ensure amounts borrowed are within individual means to ensure consistent and full repayment. While it is important to have access to credit facilities, not borrowing increases the rating with indication of a responsible borrower who only access in time of need and not because of availability of credit.
One of the factors that affect the ability to repay is cases of fraud a prevalent feature in lending. Checking and making credit report enquiries are among the key requirements that every borrower needs to keep doing to ensure there are no cases of fraud. In the event they occur, it is important for the borrower to raise the issue with the lender and sort the difference in place of failing to repay. The platform provided to solve the situation is through writing a letter of credit dispute to the lender and make a follow up to ensure it is received and effected.
Timing credit applications is an ideal way to avoid decreasing the credit rating. While it is possible to access credit from different lenders, the borrowers need to consider the timings to ensure they do not overlap. The score is affected by numerous instances of hard enquiries made by the borrower to different lenders. Where it must be done, the borrower needs to use the soft enquiry approach that does not reflect on the score ratings.
To improve on the ratings, the borrower needs to make payments on time. Through use of auto payment services from banks and setting alarms to remind on due dates is the best way to ensure the payments are done in time.
Borrowers do not require to treat credit as a source for better lives. Borrowers need to borrow only that which is important. Seeking for credit that is below the available limits is a sure way to raise individual ratings. With limited amounts to repay, the borrower gets convenience to repay and abide by the agreed terms without straining available repayment resources.