Here is how to fix your credit score. The last thing I want to feed you a sob story about how I had bad credit. My credit is far from perfect but in the past few months, I have increased it by over 100 points.
Being 25 years old, bad credit has definitely limited my life already. Here are mistakes I have made to keep you from making the same mistakes. When I first realized how much debt I incurred and how terrible my credit situation was, it was intimidating to just get started because the real question is “where DO I start?”
There are common mistakes in fixing credit scores. All of the ones listed below are ones I have made and thus, have learned from and sharing with you.
Many people face the unwanted phone calls, the troublesome bills, the depression that comes with it, and the sense of not knowing how they should handle a situation. I want to share with you information on how to go about fixing your credit score.
First and foremost, do not think that checking your credit score will hurt you. This is very important because checking your credit score is essential to maintaining a good credit score.
Credit bureaus WANT you to check your credit score on a regular basis to ensure that only accurate information is reflected. To avert this problem you should try to check your credit score at least once a year. You can get one free credit report a year to find out your credit score. There are other services available on a monthly fee if you wish to check it more often.
Second mistake people make is, applying for more credit even if you have already been denied once. This is usually a crucial element because being denied by any creditor should signal you to look up what is going on with your credit. What you ought to do to avoid this mistake is to stop applying for credit as soon as you get denied.
The reason for this is because every time a lender has to pull your credit report, you will receive a hard inquiry on your credit report. Too many hard inquiries will reduce your score.
And finally, if you have unpaid debts that have gone into collections, you should work on finding stable income, work out a budget, and talk to your creditors to get them paid off. If you find that you have unknown accounts or inaccurate information on your credit report, you should dispute it with the credit bureau.
This trouble is experienced when people ignore what is on their credit report.
What is less known is how much creditors and the credit bureau honestly just want to help you. The reason people feel like this is because they get threatening phone calls about how much they owe and they would just rather not face their debts because they do not have money to pay it off.
In reality, if you call them up, tell them you cannot pay the whole thing right now but you can work with them on a payment plan, they are more than likely going to work with you. Also, just in my personal experience, they are really a lot nicer if you call them first.
Recognize these kinds of prevalent errors with fixing your credit score and carefully avoid them. As a replacement, you may refer to the instructions above for carrying it out properly. Avoiding these mistakes is not difficult when you know to watch out for them!
Here are some tips on quickly and easily improving your credit score:
- Pay down your highest debt ratio items first. For example if you have a credit card balance of $100 on a card with a limit of $200 that’s a 50% balance on the card! Try to keep your balances under 30% on each card, so pay down your highest percentage balance first even if it’s on a card with a small overall balance. Low percentages is key to a good FICO score!
- Don’t let accounts go 30 days past due. Anytime an account goes 30 days delinquent it will begin reporting negatively on your credit report, pay just the minimum in order to keep the account current if your short on cash. Another great technique if your short on funds is to put your cash on the credit card to make the payment and then use the card to pay your other bills. Although this will not pay down your balance it will keep your payments current and free up some available credit to use towards gas, groceries, or whatever other bills you have.
- Check your credit report for accuracy. Incorrect reporting can damage your credit rating, take some time to look over your report to make sure all the information is yours and accurate.
- Create a well balanced mix of credit. Having an installment loan such as an auto loan and a revolving line of credit such as a credit card is a better combination than two credit cards or two installment loans. Ideally the perfect credit mix would include an auto loan, a mortgage, and 2-3 credit cards.
- Don’t close old accounts. Old accounts create a long track record on your credit report, closing an old account will shorten your history and therefore make you a high risk borrower.
- Pay off collection items only if the company will agree to remove them from your credit report. A paid collection item will still remain in your credit report for 7 years, negotiate with the agency to completely remove the item from your credit report if you agree to pay it.