5 Tips to increase creditworthiness.

Do you feel like achieving your financial goals is just out of reach or maybe overwhelmed by debt? Whether you’re looking to buy your dream home, or just get back on track with your finances, improving your creditworthiness is a great place to start. Here are 5 tips to do just that.

Creditworthiness can be an overwhelming topic. So here at TaleFin, we wanted to change it up and make it easy for everyone to understand. Here are some tips to boost your creditworthiness and get you financially healthy.

1. Try to save a little extra each month.

2. Try to meet all your payment obligations.

3. If you're struggling to meet your commitments, contact your credit providers.

4. Avoid opening too many accounts.

5. Habits like gambling can impact creditworthiness.

Saving a little extra each month can help you in two ways. First, it can give you a buffer in case of any unexpected expenses. Second, it shows creditors that you’re responsible for your money and can be trusted to make payments on time. Even if you can only save a small amount, it can make a big difference in your creditworthiness.

Paying your bills on time will help boost your creditworthiness. Late payments can stay on your credit report for years, so it’s important to make sure you’re meeting your payment obligations.

If you’re struggling to make ends meet, contact your credit provider, and explain your situation. Asking for help could result in suspended payments, adjusted payments or new terms for the loan. This won’t negatively impact your score, unlike a default or missed payment. Asking for help is never a bad thing.

Opening too many accounts in a short period can be a red flag for creditors. It can indicate that you’re in financial distress or looking to obtain more credit than you can afford. If you need to open a new account, make sure it’s something you can comfortably keep up with. This doesn’t include buy now, pay later accounts, yet. Even though it doesn’t affect your credit score, a lot of lenders don’t look favourably on BNPL accounts.

Habits like gambling can hurt your creditworthiness. This is because lenders see gambling as a risky activity that could lead to you defaulting on your loan. If you are struggling with gambling, help can be a call away. That one phone call could be the start for you to get back on track financially.

Aside from the tips given, there are other things you can do to improve your creditworthiness. One way is to create a Debt Reduction Plan. Start by listing all your debts from smallest to largest. Then, commit to paying off the smallest debt first. Once that debt is paid off, move on to the next smallest debt, and so on. As you pay off debt, you’ll not only improve your credit score, but you’ll also feel motivated to keep going.

You can’t improve your creditworthiness if you don’t know what your credit score is. Checking your credit report regularly will help you keep on top of your credit health and identify any errors or negative items that may be adversely affecting your score. By following the tips above, you’ll be on your way to improving creditworthiness in no time.