Have a low credit score? Paying it strategically can improve it significantly...

An installment loan is a particular sum of money which you have to pay back periodically in a series of regular payments or installments. Various types of installment loans like car loans, student loans, home loans and personal loans need to be paid on a fixed monthly schedule. This loan scheme includes a rate of interest, term and fees of repayment, which will be calculated based on the sum you are paying monthly. 

Now the best part is just like other credit accounts; if you regularly make your periodical payments on time, then these installment loans can aid you in building and maintaining strong credit points. These scores will fix your eligibility for an installment loan, as well as your rates and terms of interest. 

Here in this article, we will be looking for some simple ways for you to boost your credit score simply by using your installment loan policies:

Understand how an installment loan works:

When you get an installment loan you, you borrow a particular amount of money with a deal of paying off the sum on a monthly schedule. The repayment period of an installment loan can range from a few months to a few years, and the rate of interest may be fixed or vary with time. This means it can rise or drop in the future. 

Every installment loan comes with a fixed set of terms and conditions; it is important for you to check each one of the rules very carefully and how much is your total payment. If you are paying installment loans online, then learn how to pay safely and hassle-free. Typical installment loans types include: mortgage loan, car loan, business loan, student loan, other personal loans etc. 

Know how installment loans help in building credit:

Just like any other type of loan, every installment loan needs to be regularly paid on time, and this can really help you build up a good credit score. Your payment history is a very important manipulator of your credit score, paying every installment on time will help you to create a good impression on lenders as a responsible user of credit. Instead of taking a loan from a traditional direct lender, you can go for the option of online installment loans with Personal Money Network. It connects you with a network of money lenders who want your business. 

Go for a credit card:

A credit card is the best and fastest way to make a purchase when you cannot afford. Well, it can also be a good means to earn a better credit score, which means if you make an on-time payment via your credit card or any other method of financing, then the payment history improves your credit score by 35%. 

Most types of installment loans like home loan, student loan or car loan stands for the action of taking out an amount of money and paying it back periodically. But in the matter of revolving loans — and mainly credit cards — there is no requirement of carrying a monthly balance. Instead of that, you should go for a card with a low credit limit. 

Always try to make small charges on your credit card and re-pay the credited amount in your account fully on time, on a monthly basis, to fulfill the aim of building good credit. Try to keep the charges of your card beneath 10% of your credit limit, and this is also beneficial as it scores credit points for you. 

Choose a secured credit card:

The traditional credit cards are a bit unsafe and do not need a deposit. But a secured credit card is the one which possesses a back-up by an amount of upfront deposit. In case, you are unable to possess a traditional credit card for issues like having zero credit or making past credit mistakes, then go and apply for a secured card. You can clear out a small amount of deposit via a secured credit card. 

To boost your credit score, you have to ensure that you are choosing a secured card which reports on each of these three significant credit reporting agencies— Experian, Equifax and TransUnion. After that, you just have to pay steadily on time via your secured credit card and don’t ever forget to keep your credit charges underneath 10%. After making a periodical on time, ask your card issuer where and how does an unsecured or traditional card to boost your credit score.

Play the role of a certified user:

In case you aren't sure about getting your credit card, then look for a family member, such as a parent, guardian or spouse, who can add you as an approved user with their account. An authorized user has the opportunity to make changes to your account. However, they do not seem to be legally responsible in any way for repaying the loan amount. Paying back is the responsibility of the primary cardholder. 

Regularly monitor how much you are progressing:

Track your progress for which you are making all these credit building efforts. It will boost your will to make more progressive credit points. You can collect a credit score together with a personalized plan to aid yourself in building a better credit score. Always go through your regular credit score to make it certain that you are monitoring the movement of it, and it will also help to keep an eye for preventing any distrustful activity and identity theft.

The time it takes to boost the credit score:

The more you keep patience, the better your credit score will be. Don’t forget the key to develop a rock-solid payment statistics, following the 10% rule. If you are a beginner to this credit score game, know that timely payments for a minimum of six months is generally the time required for getting your foot in the door. 

Wrapping up

So, follow these simple tricks, pay your bills on time and enjoy watching your credit points climb higher and higher.