How to improve your credit score before taking out a student loan
Updated on November 19, 2020
If you’re considering taking out a student loan, you are probably wondering how to make sure that you have the highest possible credit score. Luckily, there are ways that you can improve your credit before you apply. Here are 4 tips that can help you boost your credit score:
1. Always make credit card payments on time
Always make sure that you make any credit card payments on time, and try to pay more than just the minimum amount where possible. You should also ensure that you pay all of your bills on time because if you miss a payment, this will be reported to credit agencies, which could negatively impact your credit score.
2. Don’t spend more than you earn
The key to not accumulating debt is making sure that you don’t spend more than you earn. However, this can be difficult if you don’t plan ahead, so create a budget and track your expenses and outgoings in comparison to your income.
3. Make an effective budget
Always make sure that your budget includes your payments for any loans or forms of credit you already have, housing, food, and all other essential expenses. Have a column for the amount you earn per month and another column for the amount that you spend. If you have enough money set aside each month for loans and other debt, your credit score is likely to improve.
4. Be aware of expenses that could come up unexpectedly
In order to effectively manage your money, you need a savings pot so you’re prepared for expenses that may come up unexpectedly. This will help to show that you will be able to make payments on student loans. Examples of situations that you should be prepared for include car and home maintenance expenses, such as breakdowns or broken appliances (this might include claims on your health insurance, home insurance or car insurance).
To find out more about paying student loan debt and how to manage your finances, contact us today.