Fixing Bad Credit in Five Simple Steps
Your credit report can effect your ability to get a loan, the terms of borrowing (interest rates, minimum payments, etc), and your ability to buy a home or other big ticket items. Regular review of your credit report comes highly recommended, as being aware is the first step to critically managing your credit rating.
If you’ve received your credit report and found that you have a less than preferable rating, rest assured that it can be fixed. A credit report is merely a reflection of your relationship with credit, and nothing stays on forever. Through patience, budgeting, and careful financial management you can improve your scores significantly. Consider taking the following steps to start repairing your credit rating today.
Look for mistakes on the report
Credit reports are not infallible. If you spot something that you believe is inaccurate or false, you have the right to dispute the record, and if you’re found to be right this mark will be removed instantly.
Some of the most common mistakes include old default judgements, personal detail errors, and incorrect credit entries. The first step to repairing a poor credit score is to ensure that the report reflecting it is wholly and completely accurate, so take this step first.
Make sure anything that can help is on there
Are you married? How long have you been at your current job? Do you own your home? Lenders love knowing facts like these, as they go to establishing your stability and improving your credit scores. Ensure that your credit report is completely up to date with all of the positive information as well as the negative information to improve your score.
Pay your bills on time. All of them.
Not paying your bills on time is a fast way to a bad credit score, and is usually merely a reflection of poor organizational skills. Automate your bill payments for small bills today, so you don’t run the risk of frequently forgetting them and thus negatively impacting your credit rating that way.
Consider debt consolidation
If you’re in a lot of debt currently, you need to make a plan to get out. One option in such situations is debt consolidation, a process whereby you unite all of your debt under one debtor, and make regular payments and a plan to ensure it gets paid off. This helps you to become debt free, and shows you when exactly that will happen!
Manage your finances carefully
Realize that because your credit rating is a reflection of your relationship with credit, and it’s currently not a great score, that you have some learning to do. Sit down and make a budget, plan to live within your means, and start borrowing carefully, to ensure that you not only get out of your current situation but that you avoid falling back into it throughout your life.