It seems that a credit card is a must-have of the modern person. Any day an unexpected circumstance may happen, which often requires a certain amount of money. And sometimes this sum is too big to give all at once. That’s when credit cards may come to help. However, in order to get a loan, one has to have a good credit score.
Otherwise, he’ll waste an awful amount of time without the desired outcome. The thing is, not so many people know about the credit score mechanism, its background, let alone improving techniques.
Luckily, we have a valuable insight from the personal finance blog. It will show you, how to strengthen your credit with an installment loan without getting in any troubles.
Credit Score Basics
First, you need to understand what is exactly on your credit score. Of course, there are numerous factors, which have influence. The most important elements are payment history and credit utilization. First one marks whether you made all payments on time.
The second element comes down to the question, whether you used all available credit. In that case, the less is more, therefore – better. These two factors make up for the more than 50 percent of the core credit. Obviously, they are worth consideration and attention. But what about other factors?
A few notable attributes include a credit history length, a number of the new accounts and credit varieties. Here are little pieces of advice for the each point. Contrary to the common misconception, a long credit history is indeed good.
Clearly, it’s true in the case of absence of any payment problems. A potential customer should limit the number of the new accounts or lenders won’t be confident in his creditability. And lastly, the more different are types of loans, the better. They demonstrate that you’re able to manage different kinds of loans with the much-needed responsibility and reliability, besides today there are so many apps that help run a budget.
Trick with the Installment Loan
It seems an absurd idea to strengthen a credit score with the taking another loan. However, it really works as a solid strategy, which has even a name. It is often called as a Savings Secure Loan Technique.
First, you need to get information about the Savings Secure Loan. In fact, a lot of credit companies offer the option, when there is enough money in your savings account. It is a sure proof variant for them because they won’t lose anyway. It works in such a manner: you get the loan – they freeze a savings account. When a client makes payments, his account gradually unfreezes.
The Savings Secure Loan Technique (or SSLT for short) is supposed to increase credit score. The deal is to find a bank, that doesn’t pull hard by the applying to the new loan. The breaking point of the SSLT is to apply for the savings account and add a sum of money that is equal to the future loan.
Then one has to apply for the secured loan. Moreover, the best option is taking a small credit for the extended period of time. It allows maximizing the benefits and getting more out of the approach. After all, it’s only a matter of technique. You repay a bigger part of the sum from the savings account all at once and wait for the few end payments. Don’t forget to schedule them for a sure win.
After the full repayment, your credit score profits: you lose nothing but win whopping benefits of the credit history.