A good credit score is one of the most important aspects of creating a positive financial future. Many factors go into determining a person’s credit score, but few are as important as obtaining new lines of credit and having good payment history. The opinions behind increasing credit scores are varied, but no matter what items a person believes attributes to a higher score, positive payment history is one of the most crucial. Here are a few ways obtaining a signature loan can help boost your score and making getting future loans easier.
Open Lines Of Credit
One of the factors that go into a credit score is the number of credit lines that a consumer has open. Too few could lead a credit reporting agency to determine that an individual does not have sufficient credit history, whereas too many could cause a person to be labeled as a risk. Obtaining a new loan could put a person in the perfect position to receive a score increase and qualify for better interest rates in the future.
On-time payments are one of the greatest contributing factors to a positive credit score. A signature loan creates new credit history quickly, which can make a borrower look more reliable in a short period of time. Payment history can have a dramatic effect on a credit rating, and cause a score to skyrocket faster than any other element that goes into factoring a consumer’s credit worthiness.
Debt To Income Ratio
If an individual has a significant debt to income ratio, it can show financial instability and cause a person to be viewed as a credit risk. Signature loans can help, as they are not revolving lines of credit and the ability to borrow against them in the future is removed. This makes a signature loan a good debt, as it has an expected payoff date, and will not be debt the consumer will have to pay off over an extended period.
Anyone who is looking to increase their credit score should consider starting the process by obtaining a signature loan. The lending experts at King of Kash make the process of getting a signature loan simple and can help anyone get the financing they need to improve their credit score and get access to emergency funds quickly. Check out their website to learn more and complete an application today.