After the great recession of 2008-09, many people are wondering how to repair their own credit score.
More people than ever today are having a trouble with their credit scores because of debt and repayment problems. This can be frustrating and even frightening, in some situations. Don’t be tempted by the quick fixes that are advertised, though – these are highly likely to backfire on you and can make your situation even worse. Repairing your credit takes some time, but it can be done. And when the economy eventually rebounds, your improved credit score (and lower debt) will put you in a great position to upgrade your life. In fact, it’s exactly actions like these by enough individuals that help to ignite an economic rebound.
Keep Up with Your Credit Report
Fixing your credit score begins with keeping up with your credit report. If you don’t examine it every once in a while, you won’t know how many errors it features. Make sure that your credit report does not list any payments as late that you made on time, as well as checking that the balance owed on every account is recorded correctly. If you happen to discover mistakes, get in contact with the credit bureau to dispute them. AnnualCreditReport.com offers a yearly free credit history report from each of the 3 major credit reporting companies: TransUnion, Equifax, & Experian.
Use Credit Cards Wisely
Credit cards can be a great weapon against bad credit – but, to paraphrase George Washington’s observation about government, credit cards can be ‘like fire, a dangerous servant and a fearful master.’ You need to use them responsibly if you are to successfully repair your credit
If you already have a card, pay down any balance on it. Pay down cards that are closest to their limits and card with the highest interest rates first. Don’t stop using your credit cards, but be careful when and how you use them.
Paying off what you accrue on your card each month can go a long way toward improving your credit. Don’t go and buy a flat screen television or furnish your house, though. Use your card for smaller things that you can pay down quickly. This will help to prove your responsibility and show future lenders that you don’t put off paying your debts.
Get Your Credit to a Stable Point
If you have bad credit, work to stabilize your credit, i.e., don’t let it get worse – work to increase continually increase your credit score, and start saving! Even if you are only able to add a small amount, the fact that you have a savings account at all will reflect well on you. Apply for a secured credit card – just don’t send out a flood of applications all at once. Credit bureaus pay attention to more than just the accounts that are successfully opened in your name. They look at the number of inquiries made regarding opening accounts. After you have a secured credit card, when you begin paying on time every time there is a payment due, your credit will improve with your met responsibility.
Consider an Installment Loan
Installment loans – such as mortgages, auto loans, and even student loans – can help your credit a great deal, if you pay them on time. Even a small installment loan can help you to get your credit healthier quickly. This applies only if you have a way to pay it back, though.
Having bad credit does not have to spell death to your financial situation. You can quite easily repair your credit with just a little attention, work, and responsibility.