Ways to Improve Your Credit Score in 2021
Is your current credit score looking shabby? Looking for ways to fix this?
Here are some handy tips that can help you improve your credit ratings in the UAE.
1. Regulate Loan Amounts
There’s a certain magical feeling that comes with seeing your loan application being accepted. However, this feeling can quickly turn into a suffocating nightmare if you take out either too many loans or borrow more money than you actually need.
Raking up a large number of loans can drag down your credit score. So, try to only borrow what and when you genuinely need it.
2. Tally Your Finances
Before you take out a loan, you must go over your current finances and review any other loan repayments that are due. If you feel like your current and future financial position are both secure enough to sustain a new loan, go ahead and take one out. However, if you’re worried about being unable to handle loan repayment in the future, do not apply for a new loan.
Receiving a brand new loan can feel like a great thing, but being unable to repay it in time can take a massive toll upon your credit ratings. So, always be sure to review your financial position before applying for a loan.
3. Debt Consolidation
If you’re trying to repair your damaged credit score, consider debt consolidation. This is the most popular way in which people overcome debt.
To perform debt consolidation, you’ll have to take out a personal loan and use it to pay off the outstanding balance. Then, once all the other loans you’ve taken out have been paid for, you can comfortably take your time to repay the personal loan monthly.
Seeing your other loans repaid, your bank is bound to improve your overall credit score. Beware, though, if you don’t pay your personal loan installments back in time, your credit score will drop, and you’ll be back to square one!
4. Credit Builder Loan
Credit builder loans are a special scheme where the borrower won’t receive the money until all repayments are entirely made. By taking out this loan and repaying it in time, you can successfully up your credit ratings in just a few months.
However, you’re going to have to pay back with interest even though you’ll be receiving the total loan amount after repayments are made. If you’d rather get the cash on the spot, try this next method…
5. Small Loans
Another brilliant way to revamp your credit score is by taking out a small loan and repaying it in time. Once the bank has seen that you’ve effectively followed through with your repayments on time, they’ll improve your credit ratings.
A small loan qualifies as something that’s under AED 5,000. Such loans can easily be covered within six months and will improve your credit score significantly. If you currently have enough money in savings to cover c, feel free to pay in bulk. However, you should wait for the loan to mature before closing it, or else your credit score won’t be affected much.
Use these brilliant methods to effectively improve your credit ratings over time. Remember, rebuilding your credit score takes time, so don’t be hasty and instead give it time!