Have you been in the red so long that your credit score’s gone for a loop? I’ve been there. I can remember a time when I was too scared to even find out what my credit rating was. But this is no time to bury your head in the sand like an ostrich. You need answers. And you need them fast. #howtorepaircreditscore
Seven Tips to Use When You Want to Repair Your Credit Score
Having a good credit score is essential when you want to make a major financial decision, such as buying a house or getting a loan to start a business.
If you have poor credit, you’ll want to take the time to make the necessary repairs as soon as you can so that you can start.
It takes time to repair your credit and many people have questions about it because they do not really understand how credit scores work. The following guide walks you through all of the credit repair answers you could possibly need when trying to get your credit back on track.
1. Know What a Credit Score Is
A credit score is a number that is determined by your credit history. Those with a positive history with lenders will have a high score while those who have had struggles with making payments will have a lower number. The lower your number is, the harder it will be for you to get approval for a loan, approval of a rental, and sometimes it could even affect your chances to get a job.
2. Know What Your Credit Score Is
It’s important to know what your credit score is at all times. You can request a copy of your credit report once per year online. The report can list debts that you have from many years ago that you still owe; it could also list debts that you did not accrue. It’s important to look over the credit report closely to make sure that everything that is listed on it is accurate.
When you notice that something on your credit report is not right, report it right away. Identity thieves will often open accounts in other peoples names and use their identity to rack up debt. Reporting the situation allows a hold to be put on an account that you did not open so that no more debt can be accrued.
Be sure to report the incident to the police so that they can start a case of identity theft for you. You should be able to report the incident to the lender or credit card company and prove to them that your identity was stolen. It can take a long time to work everything out, so you need to report it as soon as you notice that something is wrong.
3. Do Not Miss Payments to Debtors
It’s important to make sure that you pay all your bills on time. Many people make the mistake of assuming that every time they pay a bill on time it’s reported to the credit bureaus; that isn’t the case, though. The only time creditors report to the credit bureaus is when a payment is missed. They do report the amount of debt that you have on your credit card and will show when it diminishes, but utility companies and most other companies won’t report it.
It’s best to pay your debts off, in full when they are due. If you fail to pay the full debt, the creditor can report you as being delinquent. Partial delinquency on your credit will count the same way it would if you had not made a payment at all.
If possible, schedule to have your payment taken directly out of your account so there is no chance of you forgetting to pay them. This will ensure that your payments are made on time and your score can improve as much as possible and as quickly as possible.
4. Credit Cards Can Boost Your Credit
Many believe that it’s a bad idea to have a credit card. In reality, credit cards can help save your credit. Obviously, it’s a bad idea to have a lot of credit cards that are maxed out but having one or two can actually boost your credit.
It’s important to use the cards on a regular basis and pay them off completely every month or two; this can help to boost your credit because it proves that you are responsible with your money.
When applying for a credit card, it’s important to check the interest rate on the card. You want to be sure to choose a card with a very low interest rate. At first, your maximum spending limit will be very low. Over time, the amount will rise if you prove that you are able to be responsible with it and pay it off in a timely manner. If you leave your cards maxed out, it’ll negatively affect your credit score.
After you have had your cards for a year or two and have regularly paid them off religiously, contact the companies and ask to have your credit limit increased.
When a credit card amount is increased, it will improve your credit score, as well. The company can deny your plea, but it never hurts to ask for an increase. The worst they can do is say no.
5. Don’t Constantly Apply for Loans or Credit Cards
Don’t make the mistake of applying for numerous loans or credit cards in a short period of time. Every time you apply for a loan or a credit card, it shows up as a hard credit inquiry and can lower your credit score. The less hard inquiries you have against your credit score the better. It’s important to limit yourself to one or two a year so that you have a small number of hard inquiries on your credit report.
6. Don’t Get Store Credit Cards
There are some stores that offer credit cards that you can use within their store. It’s never a good idea to get them because they often have very high interest rates. Having to pay a high interest rate is a waste of money in the long run. Some of them don’t report to the credit bureaus at all unless you miss a payment. That means that there is no benefit to getting them for you or your credit report.
7. Open a Small Loan
If you want to be able to boost your credit, get a small personal loan that you can pay off in small monthly payments. The lender will report to the bureaus each month, which will ultimately increase your credit score.
It’s important to pay attention to your credit score to make sure that it’s constantly on the rise. Within a year, you should be able to see a dramatic improvement in it, making it easier to qualify for the loan that you really want. Throughout the year, it’s a good idea to use one of the free monitoring options that are available so that you can notice if anything is wrong and needs to be addressed.
If you’re ever denied for a loan, you can always reapply again later on down the road. Make sure that you ask the lender why you were denied in the first place, and they may be able to direct you to the things you need to do to improve your chances of approval in the future.
Understand that even though you have a great score, you may need to reapply a few times before you are approved. Nevertheless, improving your credit score will be important in the long run, especially when it comes to loans.
Special Thanks to Credit Repair Answers
We’re an informational resource for all things credit repair. Our goal is to help those who don’t have access to professional assistance find the information they need.
Are you ready to tackle repairing your credit score? Deep breath. It’s not as bad as it seems. And remember, the longer you procrastinate, the worse it’s going to get.