Have you found that your credit score has been falling in these recent months? The fact that you are reading this article shows that you are concerned and that is a good thing. Maintaining a good credit score is tough, but it is easier to maintain one than turning a bad credit score into a good one. When your credit score falls low you probably have gotten into a debt sinkhole that can be difficult to get out of. So pull up your credit score!
So what can you do when your credit score is falling?
1. Make the Monthly Payment
The number one reason why a person’s credit score is falling is because he has stopped paying his debts. If you have not been paying your credit card bills or your monthly loan payments in the last few months, you need to do so now.
2. Have Low Credit Balance
Credit balance refers to the total amount of spending you conduct with your credit card. If you use your credit card a lot, you will have a high credit balance and in turn, you will be charged an interest rate that will continuously increase the amount you have to pay back. So start by making a plan to bring your balance down and at the same time not using the card.
It is considered a general rule that a high credit balance will negatively affect your credit score. Aim to bring it down to 30% of your credit card limit.
3. Don’t Incur more Debt
Have you taken a car or home loan recently? Taking on more debt than your income can handle will severely affect your credit score. Take a look at your credit report and find out how much debt you are under. It is best not to apply for any more loans until your credit score stabilizes.
4. Limit the Number of your Credit Applications
Additionally, the number of the credit inquires does affect your credit score. When you apply for a loan or credit card too many times, a financial institution will check up on your credit report. High number of credit report inquiries does not bode well for your credit score.
5. Do not Close your Credit Accounts
A mistake made by many when they find their credit score is falling is to close their old credit card accounts. This in fact makes your credit score weaker. It won’t make the debt go away and neither will it increase your credit score.
The number of credit accounts actually helps build your credit history and this has a positive effect on your credit score. Rather, you should try to use these credit accounts less and make the monthly payments.
So next time you find your credit score decreasing, quickly follow these steps and get it back on track.
