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Being flagged for bad credit rating is one of the most embarrassing experiences most of the students go through. It can be painful if you are in dire need of financial assistance to cater for your educational needs. Besides, you may find it hard to access car loans or being rejected for an apartment. If you don't want to be in this situation again, you need to find innovative ways of improving your credit rating.

Here are some of the ways students can incorporate in their financial strategy to build a good credit rating.

Setting Up Payment Reminders

Setting up payment reminders is an instant credit builder for people who have been blacklisted for many years. To have a perfect payment reminder, you need to write down the deadlines for all the bills that you will be incurred, such as rent and other utilities while in college. Trends have shown that consistently paying your debts and associated bills on time can have a positive impact on your credit score within a few months. Online reminders have already helped many students to pay bills on time.

Review Your Credit Report

In the United States, the law allows you to access one credit report every year. You can choose your credit report from any of the three credit reporting agencies across the country. The importance of reviewing your credit report as a student is that you can find many errors that could be leading to the bad credit rating that you already have. If you find any errors, you need to consider fixing them immediately so that you can improve your credit status after the false information has been removed.

Apply for New Loans Sparingly

Most of the students don't understand this trick until they find themselves in the danger zone. If you are struggling to pay the current dents, avoid adding more burdens to the already existing ones. Most of the students argue that applying for new credit is helpful because it increases your total credit limit. Although this is true, it is essential to record that a new loan hurts your score, mainly when you apply for or open several new accounts within a short period.

Diversify Your Credit Accounts

If you want to build your credit within a short period, you need to add new credit accounts to your traditional and default credit accounts. Credit cards and student loans, which are the conventional credit accounts for students, are known to account for 10% of your credit rating. These credit accounts may not have a perfect representation of your credit rating. Therefore, adding other accounts in the current mix may help in improving your credit rating.

Quick Loan Shopping

When you have bad credit, sometimes it becomes hard to find ways of improving your rating. Considering quick loan shopping could be an innovative way of getting yourself out of jail. Quick loans are typically loans of small amounts that students can pay without struggling. If you pay back quick loans, you need to make sure that the repayment history is promptly reported to credit agencies. This is a measure of last resort that you can incorporate to improve your credit report.

Historically, it takes not less than three months of good credit behavior to build your credit rating to favorable rates. However, there is always an innovative strategy that students can incorporate and develop their credit ratings within a short period.

Posted on Monday, April 20, 2020 11:16 PM | Back to top

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