This is a guest post by Marina Thomas 
The credit score is the number that determines the credit position of a person. People who have taken credit and have maintained and are maintaining multiple credit accounts efficiently with timely repayments are known to have good scores which help them in getting new credit without too many hassles. However, if the credit score of a person is at the lower end then credit will be available but the options will increase severely, and the rate of interest will rise significantly. While calculating the credit score 10% of that score is dependent upon the credit balance that one possesses. Therefore it is understandable that if a credit score is to be improved, then the avenues and amount of available credit has to be increased.
The actions that can be taken to improve credit by exploring credit avenues
Building up the credit amount is vital, and it will also help in resolving the existing problems that have affected the credit score of a person. The below-mentioned steps will provide a person with the necessary information needed for deciding upon a pathway for building credit:
- Acquire new credit:
If a person is interested in enhancing the credit score, then the first important thing that is needed is to have credit because without taking any credit one cannot hope to get a credit score. Many lending agencies might not agree to provide credit to a person who has no previous credit record. Therefore it is better to build one’s credit report bit by bit by taking new loans in a sensible a calculated manner.
- Select an appropriate credit card in the initial stage:
Acquiring a credit card, in the beginning, might seem a bit difficult for individuals who are not well acquainted with credit cards, but some companies specially formulate credit cards for first-time holders. These credit cards are also termed as starter credit cards. The starter cards usually offer a considerably low credit. For initiating the line of credit, it is a good way, to begin with, a relatively small amount of loan. However one should not choose just any kind of initial credit card because whenever it comes to credit building, it is important to remain alert and do a bit of research. The credit card should satisfy the condition of providing a small credit amount but also needs to have a relatively moderate rate of interest. High rate credit cards are to avoid as one needs to get used to the rhythm of credit taking and solving before moving on to the other areas of credit acquisition. In this regard, a person can also opt for a secured type of credit. These credit cards allow a person to invest a certain amount and this amount is converted into the credit that is provided to the cardholder. There is no need for any credit to forward an application for such credit cards and interest is also nil,this is a huge advantage for a person who is beginning to build credit. Hence there are ways to increase your credit score by 200 points, but no hasty steps should be taken with credit gaining as it will do more harm than good.
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- Reining the credit taking attitude
In the initial phase, it is very important to keep oneself grounded and control the urge of taking a huge credit from one or more sources. The sudden taking of massive credit can cause many problems like a high balance which will lower the score of a person. Therefore potential issues should be eliminated by keeping the risk appetite measured in the starting phase so that one gets to know about the credit field meticulously and builds a good credit before venturing into risky prospects of taking enormous credit.
- Build the credit score by being punctual about loan payments:
Whenever credit is taken, it is understood that a loan has been acquired which has to be repaid according to the terms and conditions of the credit providing company.Accounts that are new should not be converted into debt accounts by being slack with the payment procedure. The presence of a loan will impact the 10% of the score, but if the same loan is not repaid, then it will negatively impact the score. Then the task will become two-fold one is to elevate the score and another is to solve the debt. Therefore being extremely diligent about all kinds of payments is very necessary. If payments are done timely from the very beginning, then the credit score will also move upwards quickly.
- Using multiple sources for constructing the credit line:
When a single source of credit is used when the score is not very heartening but when multiple credit avenues are being used, then it will positively impact the score. Small loans from banks or other sources might be a good idea for diversifying the credit taken. However, care should betaken so that too many loans are not taken in quick succession because that also means that the payments have to be made together which might get tricky and make a person land in a puddle of debt.
- Keeping track of the cards and upgrading to better cards:
Multiple credit cards are used by many, and initial cards with low credit balances do not offer any discounts. Therefore when a person has learned to manage credit effective mannerly then choosing a better card that has multiple benefits is sensible however it is also important to check the balances or credit taken in each card regularly. Having a credit card is like having a financial responsibility to the credit taken should be measured and tracked so that repayments are done. The benefits offered by different credit cards should be applied sensibly so that the person is in a painful position. Therefore there are ways to make the credit accounts impact the credit score, but all steps that are taken for increasing credit should be taken with extreme caution and care.
Author Bio
Marina Thomas is a marketing and communication expert. She also serves as a content developer with many years of experience. She helps clients in long-term wealth plans. She has previously covered an extensive range of topics in her posts, including business debt consolidation and start-ups.
