Connect with us

Finance

How Installment Loans Online can Help You Boost Credit Score?

Published

on

Congratulations for taking a bold step towards building your credit score! Building a good credit score takes time, and if yours is not where you want it to be, don’t beat yourself up. There are actually some legitimate ways that you can use to build your credit score! Well, this article will tell you about installment loans online. We will also tell how these types of loans can help you build your credit score. 

How Installment Loans Online can Help You Boost Credit Score?

Boost Credit Score

Boost Credit Score

What are Installment Loans?

An installment loan is a type of short term loan that allows you to settle a debt by making equal payments over a specific duration. There is no standard time for repaying an installment but generally speaking, it depends on the agreement between you, that is, the borrower, and the lender. 

Using Installment Loans Online to Build Your Credit Score 

Installment loans help build the credit score if you stick on repayment as per the agreement. The credit score gives lenders a glimpse of your financial discipline. It then serves as the basis in which they will determine whether to give you a loan or not. 

Here are ways to use installment loans online to build your credit score: 

  • Pay on time 

Nobody likes disappointments, and lenders are not an exception. If you disappoint by depositing money past the agreed date, or worse, not sending the full amount, it sends the wrong image that can take years to rectify, if you ever succeed. The biggest influence of lenders on your credit score is the report they keep for future reference or send to credit bureaus. With that in mind, make the payments at the agreed times, knowing that it will have an impact on your financial life in the future.

  • Reduce your credit utilization 

Credit utilization follows the payment history in the list of important factors used to calculate the credit score. It is the portion of the credit limit that you will be using at a particular time, and you can calculate by dividing the credit card balance with the limit and expressing it as a percentage. 

The majority of lenders recommend keeping the utilization rate at 30% or below. They see a high credit utilization rate as a sign that your debt is not manageable. If you have already exceeded, all is not lost. You can build the score by implementing a few ways. 

First, pay the balance in full amount on the recommended dates. This helps lenders keep a payment history and share it with the bureau. In consequence, the next time that you will be applying for a loan, the lender will review the data before making a decision. 

The other way of reducing the credit utilization rate is requesting an increase in credit limit. This, however, should not drive you to increase the loan. Depending on the lender, you may be able to apply for the credit limit increase online. The other method is applying for removal as a holder of a credit card that has high balances. This, however, is not effective in all cases. If, for example, you are authorized to use a particular credit card with your spouse, you can apply for temporary removal; the high balance will not affect your credit score. 

Another option is to use a debt consolidation loan to settle the credit card balance. On one side, this is not monumental because you are not reducing the balances, but on the other hand, paying credit card balances with a loan leads to a 0% utilization rate. 

  • Remove erroneous information from credit reports 

Mistakes happen, especially when dealing with numerical data. An installment loan lender can mistype or ignore data and tell a different story about your financial health. In that case, be an active participant in making decisions about your financial status. So what should you do? Get your credit reports, review, and dispute any erroneous information. Make it a habit to review the statements because some credit card providers can manipulate data for their benefit. 

Important tip: These are the main ways in which you can improve your credit score. Since you already know that building the score is not an overnight activity, incorporate other actions such as using the money responsibly and not taking installment loans without a genuine reason. 

Benefits of Building a Credit Score? 

  • It becomes easy to get loans 

Can you be trusted with money? Your credit score will tell. Having enough cash gives peace of mind, and knowing that you can get a certain amount if you need it adds to the emotion. Take up the easy strategies of improving the credit score and in turn, increase chances of getting loans. There are also high chances of getting money to lend to you at low-interest rates. 

  • It helps during emergencies 

As mentioned above, having a good credit score quickens the loan-approval process. This may not appear very convincing, but the money will come in handy if you have an emergency. It can be a health bill, car breakdown, education loans, etc. If you don’t have cash, you can turn to a lender and get instant help but only if you can be trusted to payback! 

  • It allows you to make large purchases easily 

You already know about the convenience of paying for goods and services electronically. The good thing about building your credit score is the amount that will be at your disposal. A high credit score gives you the privilege to enjoy consumer protection. For example, MasterCard and American Express offer price protection, warranties, and coverage for lost or damaged goods. 

Conclusion 

A low credit score is a red flag to money lenders. They are all aware that in money matters there is a need to take caution when loaning out money. Most of them won’t hesitate to decline an application if your credit score is low. So, work to improve your credit score using installment loans online but just don’t take two steps forward and one back again!

Karan Bhardwaj, Founder of Geeknism worked as a Digital Marketer since 2012 and has expertise in Tech Niche. You can follow him on Facebook and Twitter.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts

Best Email Validators Best Email Validators
Business2 days ago

Top 10 Email Validators Every Business Should Know

An email validator is an irreplaceable tool for any company. If you are taking full advantage of email marketing, the...

Best Managed IT Services Best Managed IT Services
Online Services2 days ago

How To Look For the Right Managed IT Services for Big or Small Businesses?

Running a business entails many responsibilities. Often, you will find yourself juggling several tasks and challenges at once. Perhaps, you...

How to Install Solar Panel at Home How to Install Solar Panel at Home
How To6 days ago

How to Install Solar Panel at Home? – Complete Guide

Are you attempting to DIY your solar panel project? Good for you! Check out this brief but informative guide to...

How to Transition to CRM Applications How to Transition to CRM Applications
How To1 week ago

How to Transition to CRM Applications?

There were days when companies used to say that content is a good thing to have on their sites, but...

How do music files work How do music files work
How To1 week ago

How Do Music Files Work? – In-Depth Guide

Digital music has reshaped the habits of modern listeners for good. This ubiquitous trend is constantly evolving and opening up...

Best Marketing Tips for Businesses Best Marketing Tips for Businesses
Business2 weeks ago

Best Marketing Tips for Businesses that are Just Starting

Running a business can be super hard. Running a startup, that’s a whole nother beast of a challenge in itself....

Online Payday Loans Online Payday Loans
Finance2 weeks ago

A Move To E-Commerce Model- Online Payday Loans For Bad Credit Can Help

The growth of e-commerce in the last decade has driven brick-and-mortar retailers to make a move towards this selling model....

How to Remove VarianceTV Adware How to Remove VarianceTV Adware
How To3 weeks ago

VarianceTV Adware Remove Guide [Best Fixing Methods]

Hey Guys, Welcome back to all of your on Geeknism, today we are going to explain how you can remove...

The ISO Zone Alternatives The ISO Zone Alternatives
Games3 weeks ago

The ISO Zone Alternatives 2020 – Sites Like The ISO Zone

Hey Guys, Today we are going to share another alternative for all of you who are looking for the alternative...

Best Gift Ideas for Gaming Freaks Best Gift Ideas for Gaming Freaks
Games3 weeks ago

Best Gift Ideas for Gaming Freaks [2020 List]

There are two types of people in this world – one type is really easy to buy for. You can...

Our Categories