Global internet commerce is an explosive entity. The advent of the online marketplace and low U.S. interest rates means there is always something to want and buy, and consumers with clean credit are reaping the benefits of smart planning and wise spending. A high credit score translates into financial freedom, something many consumers struggle to achieve on a daily basis. If you are looking for a direct route to getting what you want, follow the tips below; the rewards are worth the effort.
- Emphasize your commitment. Maintaining a record of clean credit is essential to opening new doors. Illustrate your trustworthy nature by paying attention to your monthly bills. Avoid late payments and citations at all costs. If you want the funds for a big ticket item, lenders need to know they can count on you.
Your reward: A smooth credit application process with willing lenders becomes more likely.
- Practice versatility. Skilled consumers like to spread their expertise around. If you are looking to establish broad credit capability, avoid putting all your eggs in one basket. Make sure to gain experience with all kinds of credit. For example, installment loans (e.g., auto, mortgage, personal loans, etc.) and revolving debt (e.g., credit cards with interest) represent two pieces of a larger pie. Illustrate your flexibility by trying a slice of each.
Your reward: Lenders value those who have demonstrated competence with diverse types of financial obligations.
- Keep your options open. Wanting and needing credit are very different propositions. While you may need credit, possessing too much can give the impression of an insatiable appetite. What’s worse, it could suggest that you are a bad risk. Even if your credit is spotless, lenders aren’t likely to add water to an overflowing debt situation. Ideally, your maximum debt commitments should never exceed 40 percent, including mortgages, credit cards, etc. If you would like to keep the path of credit approval running smoothly, scale back spending and save your bargaining chips. They may prove more valuable in the future.
Your reward: Avoiding credit overextension can lead to larger lines of credit when you need them.
- Illustrate long-term potential. A lengthy history of clean credit will help you stand out in a room full of newbies. In that regard, avoid closing old credit card accounts that serve to document your credit history. Not only will spending responsibly help your credit score, maintaining old accounts, especially those with higher but relatively unused credit lines, will solidify your clean credit history. Lenders rely on customers with savvy, a quality you will maintain with a long-standing and successful past.
Your reward: Lenders prefer working with well-established customers.
- Move forward with your finances. When getting what you want is imperative, establishing new credit will likely follow suit. This is a fortunate event for people looking to strengthen their creditworthiness in the years ahead. Lenders want to see you as an active participant on their credit radar rather than a stagnant blip. Keep things fresh by adding to your credit portfolio whenever appropriate.
Your reward: An up-to-date credit report will serve to underscore your current financial successes.