Fix Your Credit
How You Can Fix and Improve Your Bad Credit
If you are planning to apply for a mortgage, loan, or credit card, having a good credit score means you can qualify for better terms and lower interest rates when you want to borrow money.
But due to unforeseen circumstances, you may encounter difficulties in complying with your payment terms, resulting in a bad credit score. Good thing, credit repair is way more manageable than you can imagine.
There’s no better time to fix your credit score but now. So here are simple steps you can follow to fix and improve it.
Get copies of your credit reports
Always ask credit bureaus such as Equifax, Experian, and TransUnion to provide a free copy of your credit report every year. File and organize them so it's easy for you to check and monitor.
Review credit reports for possible errors
Now that you have the copy, make sure you will read it thoroughly. It may not be easy to understand at first, but trying your best to check everything will benefit you, especially if you think there are errors you can dispute.
Dispute errors in your credit report
Every time you ask for your credit report, there's also an included information on how you can dispute errors. Follow necessary steps on how you can send a dispute so the credit bureau can investigate it and see if it is legitimate.
Settle your past dues
Did you know that almost 35% of your credit score is from your payment history? Therefore, having past due accounts can result in bad credit. So if you have past dues, settle them right away to help fix your credit score.
Increase your credit limits
Aside from payment history, credit card utilization or the ratio of your available credit to your credit used also plays a big part in your credit score.
To improve the ratio, you need to pay down all your balances first or you can request an increase in your credit limit. Try to call your credit card company and ask nicely. If they see you have a decent record in your payment history, they will most likely grant to increase your limit.
Pay high-interest accounts first
This is good advice if you have multiple balances you need to pay off. Most professionals suggested settling first the account with the highest interest rate to help fix your bad credit. Over time, this can help you increase your credit length and maintain your credit score.
Apply for a new credit
After working hard to resolve the negative marks on your credit report, you can start to reestablish your credit by applying for a new account. Though it may be risky since past delinquent records won't allow you to get approved for a new credit card.
It's best to only limit your application to one until you can see an improvement in your credit score. Every time you make a new credit application, credit inquiries will keep on adding to your credit report. And it's not a good solution to fix your credit score and will also prevent you from getting approved.
If you fail to open a new major credit card, you can choose to open a retail store credit card instead. They approve applicants if they have a history of bad credit.
Make it a habit to always pay your bill on time
Remember, even a slight delay in your payment can cause a bad record to your credit score. So after working on fixing it and finally achieving a good score, make sure to practice paying your bills on time. Learn from your past lesson, and make sure to do everything you can to not miss any payment.
Of course, there will be times when you will encounter difficulties. To give you a tip, especially if you have many bills to pay, it's important to prioritize your mortgage or credit card payments since they will reflect on your credit report. It's best to choose to pay late for utilities or cell phone providers since they don't appear on your work.
And then continue to work hard so you won't need to delay any types of payment you have. It will not just benefit your credit score in the long run but also help you lessen your financial burdens and increase your savings.
Seek professional financial advice
For sure you still have more plans in managing your credit in the future. Maintaining a good credit score is a lot of burden and responsibility, so if you need help when it feels too overwhelming, you can seek professional financial advice. In this way, you can have clear guidance on how you should discipline yourself when it comes to your finances and avoid doing stuff that can cause negative marks on your credit report.
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