There are few things more important to your financial well-being than your credit score. A good credit score means you get the best interest rates on car loans, mortgages and credit cards, and it even can mean better rates on insurance policies and a better chance of renting an apartment Conversely, a bad credit score can mean you pay additional fees and higher interest rates. If your credit is not in the best shape, you can improve it in seven simple steps.
The very first thing you need to do is to check your credit report regularly. All three credit bureaus must allow you a free copy of your credit report each year, so if you space the checks out, you can check every three months. You also may be able to get free access to your credit report or credit score in other ways, such as through your bank or a credit card company.
The second step to improving your credit is quickly correcting any mistakes you find on your credit report. The most important ones to fix are accounts listed as past due that aren’t or lines of credit being incorrectly listed as open or close. Even relatively minor mistakes such as missing credit history or a misspelling of your name can cause problems and are important to fix.
Once you have checked your report and fixed mistakes, it’s time to focus on deficiencies that you need to correct. Your third step should be to correct any delinquent accounts as soon as possible. Dedicate all extra funds you can spare to bring past due accounts current. However, make sure you make at least the minimum payment due on any other debts you have.
The fourth step for improving your credit score should be to focus on paying down debt. Debt can hurt you in a couple of ways. For one thing, it costs you extra money in the form of the interest you have to pay. And if you carry a lot of it, it can be a drag on your credit score. A significant portion of your score is based on how much debt you have relative to the amount of credit you have available, so if you have a lot of debt, this ratio can be so high that it hurts your score.
Another step to reduce debt could be debt consolidation. You can do this a number of ways. You might use a balance transfer to consolidate credit card debt. You can also use a debt consolidation loan, and you might seek credit repair company help to get one. The advantages of debt consolidation is that you can get lower interest rates and lower payments, which can help you get a better handle on your debt and pay it off faster.
The sixth step in your credit repair journey is to consider credit repair company help. Credit repair companies may be able to help you with tasks that you have trouble doing yourself. Do your research and make sure you are dealing with a legitimate credit repair firm.
The last step is the one that is most important to ensure you don’t fall back into the bad credit trap. Whatever you do, pay your bills on time. The easiest way to hurt your credit is to fall behind on payments. Keeping current on all your bills will help you keep your credit score in good shape.
Fixing your bad credit sounds hard, but it doesn’t have to be. Follow these steps, and you will give your credit score a boost in no time.