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As many people already know, your credit rating is extremely important if you’re going to take out a loan. Ideally, the better your credit rating, the bigger loan amount you could take out, the easier it is for shutterstock_155667674your loan application to be approved by a lender and the more attractive the rates they’ll give you.

On the other hand, having bad credit will hurt your chances of getting your loan application approved. Even with the availability of bad credit loans, the choices are often limited and typically come with interest rates that are higher than standard loans.

In this article, we will share with you a number of tips that could help boost your credit rating and thus give you more favourable options when you’re looking to take out a loan.

Pay on time

It all starts here. If you want to get a good credit rating, you have to pay your debts on time. Your credit history will show lenders not only the amount of debt you have, but also how much of it you have repaid, and how soon you repaid them.

Naturally, lenders prefer borrowers who pay their debts on time, so don’t wait for several weeks before you pay your bills – pay them as soon as possible.

Aside from keeping your credit rating stellar, paying your debts on time will also have a positive impact on your finances, because you won’t be paying late fees and charges by being prompt with your payments.

If remembering to pay your bills on time is the issue for you then a simple alarm that alerts you every month/fortnight could also help you in managing your outstanding debt.

Pay down your balances

If you have revolving debt, don’t pay it off entirely, even if it sounds like the most logical course of action. The reason for this is that lenders want to be able to see how well you manage your debt. When you pay your debt in full, there will be no debt to manage thus leaving lenders with nothing to gauge your debt management skills against.

Seek professional advice

If you are thinking of applying for a loan in the near future and are not sure about the state of your credit rating, seek the advice of a professional. A mortgage broker, for example, can advise you on the best course of action regarding your credit rating and find you the best loan no matter your circumstances.

Contact Launch Finance today to speaker to one of our leading brokers.