Make way for the perfect credit score and enjoy your finances

Ailsa Adam August 22, 2022

Debt is a term that many people are scared of. There are many sources that give you knowledge about debts and their side effects.

Most people think debt is a negative source for many people, but it has a positive side too. You can make use of the debt in a positive way and improve your financial situation. You should know how to use that debt in your favor.

You can multiply your returns by using it in an exponential form. You can use your borrowed money to increase your return by using leverage.

The beneficial side of debt

Debt will help you to achieve the required return, but there is a greater risk of losing your capital. If you borrow from taking debt consolidation loans with bad credit from a direct lender, you can use it as an advantage and boost your credit score.

In the case of insurance, you can use your credit scores to determine the level of risk as there is a direct relationship between the credit score and claim activity.

Ways to raise your credit score

To improve your credit score, implement the following ways in your financial life.

1. Check your credit report

You can have access to free credit reports from various credit reporting agencies.

To improve your credit score, you can find errors in your report to check the flaws and how to resolve them.

Look for negative factors that are lowering your credit score and work to eliminate them from your credit report. You can improve your credit score by debt reduction and making bill payments on time.

2. Bill payment on time

To avoid any error in your credit report, you can set up your payments in an automated process. Either you can set up email alerts or use the bank’s bill pay service. This will help you to avoid any gap in your payment methods.

3. Pay off collections

To increase your score, you can increase your pay-off collection. If there is a debt that has gone into collection, it will stay in your credit report for a minimum of seven years. But make sure there is no delay on your pay-off collections.

4. Get hold of past due bills

To maintain a good credit score, try not to miss any payments and if in case you miss out on any payments, try to catch up to them as soon as possible.

A missing payment leads to a reduction in credit score by almost 100 points. It may affect your credit score initially, but your credit score depends on the recent activity, so focus on your day-to-day activities and try to maintain your payment cycle.

5. Keep your credit cards low on balance

Maintain a maximum balance of 10% or below to improve your credit score. Keeping a balance over or close to the limit will lower the credit score. Nobody wants a lower credit score. Hence, following the advice to keep a perfect credit score is crucial.

6. Do not transfer your debt

Your balance transfer will increase your debt load. You may transfer the balance to lower your interest rate but do not continue as it will severely affect your credit score.

According to major financial sources, paying off your debt completely is the most effective way to boost your score.

If you are planning to transfer it, get some advice first. This will not boost your score. Instead, it will reduce your credit score.

7. Do not close credit card accounts that are not used

Let the unused accounts remain open as it is an indication of your credit management in an effective way.

Check with all the factors before closing your unused accounts, as a long credit history contributes to a good score.   

8. Get new credit shortly

You can always access your credit report, and in case of borrowing a further debt, i.e., a car loan or a mortgage, you can check your credit report and determine your rate of interest.

You can borrow more credit from many trusted lenders and secure your borrowing. This will instantly boost your credit score.

Before borrowing, remember to inquire a little less, as too much inquiring can impact your credit score in a negative way.

9. Prefer credit mix

Most financial institutions prefer their borrowers with a mix of both instalment loans and credit cards.

You can keep one or two credit cards with you if you are planning to pay off your loan, such as a pound 2000 money loan from a direct lender. Having at least one will prove your credit management and create a good image.

The background story of these cards can be daunting. It is important to repay the amounts on time. If you do not do it, keeping too many credit cards is no point.

10. Be careful while applying more credit

If you do not require credit, do not apply for it. Do not apply for any kind of credit just to boost your score.

If somehow you avail of loans and you are not able to repay, you may face problems in repayment. Once you miss out on any repayments, it can be tough for you.

Also, be careful about your loan accounts. Do not open several accounts together, as it can negatively impact your credit score. Try to have only one loan account as it tells the authenticity of the borrower.


As against the traditional school of thought, debt can prove to be really beneficial for the borrowers if used efficiently.

Although it can lead to a downfall of a borrower but can prove to be a boon if used in the right manner. Debt can help individuals to make purchases that they cannot afford otherwise.

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