The higher your credit score is, the easier it will be for you to get a loan. But that isn’t all: having a high credit score also means you will likely be able to afford the interest rates you get offered on the loans you are approved for. Essentially, having a good credit score can save you a bundle. It makes good financial sense—but what happens when you already have problems with your credit score? Don’t despair; there may be a way for you to recover. Here are a few tips for how to fix your credit. |
Tip #1: Know your credit score
You can’t fix your credit score if you don’t know what it is. To start, check your credit reports by obtaining them through the three major credit bureaus: Experian, Transunion, and Equifax. But remember, just checking once isn’t how to fix your credit; review your credit reports every year so you know things are keeping on track.
Tip #2: Know what’s causing your credit score to suffer
There are a lot of factors that can damage your credit score, and while it is possible to recover your score, you first need to know which factors are affecting you. For instance, unemployment is a big problem when it comes to your credit score. Losing those steady paychecks can make it hard to pay bills on time, and each missed or late payment can cost your credit score. However, unemployment isn’t the only factor. Some people simply have a hard time remembering to pay bills on time. If this is your problem, setting up something like auto-payments through your bank will go a long way when it comes to strategies for how to fix your credit score.
Do you have a credit history? A lot of people don’t realize that not having a credit history can be just as bad as having a bad credit report. You need to build up a credit rating by establishing credit—simply put, your credit score can’t grow if you don’t use credit. Of course, this doesn’t mean you need to go max out your credit cards. Get a credit card, use it wisely (and interest free, if possible), and pay your balance off on time each month. One strategy for how to fix your credit when it has been negatively influenced by non-use is to automatically pay regularly scheduled bills—like your cell phone bill, hydro or cable—using your credit card. Then pay your credit card balance off each month. In time, your credit score will improve.
Tip #3: Consult a credit repair company
Your credit may not simply be suffering from mistakes you’ve made. Studies have shown most credit users to have errors on their credit reports—these can be clerical errors, mistaken identities, inaccuracies, or incomplete data—and these errors can cause a lot of damage to your credit score. Unfortunately, they also take a lot of time, diligence, and thoroughness to resolve, so if you want to know how to fix your credit fast and effectively, then you want to consult a credit repair company so an experienced professional can help you clean up your report.
Take control of your credit today and let your credit work for you.
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