We all spend a lot of time concerned about our credit score, and rightly so. If our scores are suffering, then we can find ourselves in difficult situations. It’s a number that retailers assess when you are opening up a line of credit and landlords take into consideration before allowing you to start renting.
Why Does Your Credit Score Matter?
It would be nice to ignore the credit scores and live your life without restraining yourself. However, giving into that temptation would be detrimental to your financial future. So, how do you keep your scores from plummeting? How much debt is too much debt? And how can you improve your scores with significant debt to your name? Let’s answer these questions.
The Best Way to Improve Your Credit Score
If you are struggling to keep up with your credit card payments, you could be negatively impacting your credit scores. The good news is that you can improve your scores and maintain those excellent numbers after you have paid off your debt. One of the best ways to improve your credit score is to obtain a debt consolidation loan from Lendah. It may seem counterintuitive to sign up for another loan in the pursuit of increasing your credit score. However, a debt consolidation loan can help you pay off your debt quicker, lower your interest rates, and lower your credit score.
Why You Should Chose a Debt Consolidation Loan
According to Forbes Advisor, a debt consolidation loan can help your credit score in two significant ways: decreasing your credit utilization and improving your payment history in the long term.
Credit Utilization Ratio
Your credit utilization ratio is “the percentage of available credit that you’re using at any time.” By maintaining a lower credit utilization ratio, you will be able to increase your scores as time goes on. Forbes states that a debt consolidation loan could really go a long way in improving that ratio. “If you consolidate multiple credit card debts into one new personal loan, your credit utilization ratio and credit score could improve. Credit cards and personal loans are considered two separate types of debt when assessing your credit mix.”
Payment History
As your payment history makes up close to 40% of your credit score, it’s important to know how a debt consolidation loan can benefit your credit health. It’s easy to struggle making multiple payments a month, especially with rising interest rates. But with a debt consolidation loan, you only have to make one payment a month, potentially with a lower interest rate. The experts at Lendah work diligently to find the best loan options and interest rates. You can visit our Loans page and learn more about how we can find the right loan option for you.
Your Next Steps
At the end of the day, taking the time to nurture and grow your credit score will only set you up for a successful financial future. We understand that it can be confusing and seem like an impossible task. Just know that the team at Lendah is in your corner every step of the way. If you want to know how you can increase your credit score with a personal loan, visit our website or call 844-860-0766 and set up a free consultation.
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