3 Ways to Fix Your Bad Credit
Are you struggling to qualify for loans because of bad credit? And when you do qualify for loans and credit cards, are lenders only willing to offer you extremely high interest rates?
If you answered yes to either of those questions, it’s time to start making moves to fix your bad credit. It is possible to stop getting turned down on loan applications and get the best interest rates available as soon as you turn your credit score around.
To make this possible, please use the three ways that we are going to share with you right now.
- Keep Track of Your Credit Reports
The first thing to do when it comes to fixing your bad credit is to check on all of your credit reports. By doing so, you’ll be able to discover if there are errors and other mistakes that could be affecting your overall credit score.
As you read over your credit reports from all three credit bureaus (Experian, Equifax, TransUnion) you should keep an eye out for three particular mistakes that include:
Duplicate debt – as you look at your credit report, did you discover that one or all of the credit bureaus have the same debt listed more than once? If this occurred within the last seven years or less, you should contact the credit bureau and let them know about the mistake. They should remove any duplicates and only leave one instance and nothing more.
Incorrect personal information and address – if you discover that there is incorrect personal information about you on your credit reports, including an incorrect address, it’s quite possible that the credit bureaus are mistaking you for someone else. So let them know about the errors, clear them up, and your credit score should improve.
Information that is out of date – if you missed payments on a credit card or loan, or stopped paying them all together, these negative marks should come off your credit report within seven years. And if you file bankruptcy, the negative blemishes should get removed from your credit report in 10 years. If they are still on your report after the allotted time, contact the credit bureaus to have the old items removed and watch your credit score improve almost immediately.
- Credit Utilization
There are two particular ways that you can lower your credit utilization. And by lowering your credit utilization ratio, you will boost your credit score. In fact, it’s wise to only use 30% or less of your available credit. Otherwise your credit score will drop.
To lower your credit utilization, you can do the following two things:
Raise your credit limit – to get below 30%, contact your credit card company and ask them to raise your credit limit. If you currently owe $500 on a credit card with a $1000 limit, you should contact the credit card company and ask them to raise your credit limit to $2000. If they agree, your credit utilization will drop to 25%.
Pay down your debts – the other option is to start paying down your debts. Work toward paying your debts so that your credit utilization is below 30%.
- Apply for Credit Strategically
Unfortunately, there are conflicting rules when applying for new credit. But we know one thing for certain: your credit score will drop when you apply for new credit.
So, if you intend to apply for multiple types of credit, do so all at the same time. This way, when the credit bureaus notice these tightly grouped inquiries, they will only see them as one, which will limit the damage done to your score.
According to Repair.credit, experts sharing more info on how to repair credit, “We are aware that we all have a credit report, but we don’t always understand what it all means.”
Please use these three strategies to fix your bad credit and improve your credit score.