Everybody makes mistakes. But when it comes to your credit rating, an error can stay with you for years! By using these tips and hacks to fix your credit rating, you should be able to get back on the right track in no time.
1. Take responsibility
The first step in repairing your credit rating is taking responsibility for whatever mistakes you may have made. If there was a time where you missed some payments, or maybe you didn’t make any for a while, then acknowledge this and take responsibility for it.
If you’re trying to rebuild your credit rating for the future, you need to show that it is something you are willing to do. Owning up to what has happened in the past will be vital in dealing with any creditors later down the line.
2. Be proactive
If your credit rating has been damaged by late payment fees and other such issues, the best thing to do is be proactive about fixing it. Make sure you take care of your bills on time, and if there are any issues, call up your creditors to let them know.
If you can’t pay your bills in full, try to pay off the highest interest account first. This way, you will save yourself money on interest over time.
Choose one card and focus on paying it down faster than the rest. By putting all of your extra income toward that debt’s payoff, you’ll be free of it the fastest.
3. Get credit reports
Get a copy of all three of your credit reports (TransUnion, Equifax & Experian) so that you can spot mistakes or possible errors. You can do this either online or by updating your address with the relevant agencies and requesting a hard copy.
The reports will show you how much credit is available to you, your payment history, and any late payments. If there are any errors or mistakes on the reports, then be sure to contact the relevant credit agency to get them removed.
Credit report errors can stay on your records for up to seven years (this time limit is extended to 10 years if it relates to your identity), so you must check the reports thoroughly.
4. Dispute any errors
If you notice anything on your credit report that is incorrect, it’s time to dispute it! The best way to do this is to contact the creditor in question and tell them what you think is wrong. If they don’t get back to you or say that the information is correct, then contact one of the credit bureaus (TransUnion, Equifax & Experian) and ask them to investigate.
The credit bureaus should contact the creditor in question and ask them to look into it. If they find out that there is an error, you will be notified by the credit bureau, which should resolve the issue.
5. Improve your score
If you are looking for debt consolidation, find out more about what they offer before signing up. Make sure that you can afford the monthly payment and evaluate how it will affect your debt-to-income ratio.
You should also ask the credit repair company if they will monitor your credit report on an ongoing basis. If so, this could cost you additional money. You should only sign up for these services once you are sure that it is right for you.
Be careful about signing on with a debt settlement company without doing your research first. Make sure that they don’t charge any upfront fees and communicate with the lenders on your behalf.
Only credit repair companies that are members of reputable trade associations like TRUSTe, BBB, or ACAP. This means that they have to follow a specific code of conduct and meet certain requirements regarding how you can expect them to treat you.
6. Keep on top of it
If you don’t have any loans, start paying off the smallest balance first so that you can save more interest over time. You will have a higher proportion of available credit by paying off some of your smaller debts, improving your score.
If you can’t pay your bills in full, try to pay off the highest interest account first. This way, you will save yourself money on interest over time.
Choose one card and focus on paying it down faster than the rest. By putting all of your extra income toward that debt’s payoff, you’ll be free of it the fastest.
The best way to get rid of any problems with your credit rating is just by keeping on top of it. Make sure that you pay all of your bills on time, and if there are any issues, take care of them as soon as possible.
7. Use credit, don’t abuse it
The number one credit rule is that you should only borrow as much as you know you can repay. So even if your goal is to have a perfect 850 score, you could still end up with a bad score by borrowing too much and not being able to afford the payments.
For example, if you have a credit card with a $5000 limit, only borrow the amount you know you can pay back. Your score takes into account how much of your available credit you are using at any given time. If you max out all of your cards, it will look like you’re over-extending yourself, which could potentially lower your score.
Everyone needs to have at least one major credit card in their wallet. This is because your credit score takes into account how you use different types of credit. For example, if you have a car loan but haven’t used your credit cards, it looks like you are not responsible for money, which will lower your credit score.
8. Know when to cancel
Whenever you sign up for a new credit card, your score may drop slightly while the credit bureau checks to see if it is valid. This shouldn’t last long, but if you are planning on applying for another loan soon (like an auto loan), you should wait until after that application is complete before signing up for another card.
Conclusion
If you know that your credit score isn’t good, then it may be best only to use one credit card at a time so that you can pay it off in full each month. This way, you won’t have to worry about any negative impacts on your score from balances or late payments.
For more tips and advice on fast credit repair, you can send us, The Oasis Firm, a message or an inquiry. We’d be happy to help you with all your credit repair needs.