How To Fix And Boost Your Credit Score

2019/02/25

Ask anyone around you about how to repair your credit or how to fix credit. They will all tell you what to do. However, none of them may be actually following what they are preaching. Ask yourself. Do you know what it takes to sound finances and better credit ratings? You do. In fact, you know the factors that lead to better financial stability. You also know how your credit ratings can be improved. If you are not sure, read on.

A good credit score is a sign of good financial health. However, it is also possible that financially well to do people have no credit history at all. This is because, they don’t use a credit card and they take loans at all. They are people who make good sums of money, spend it wisely and make sound investments. They may have no credit history, but they are financially healthy.

If you have bad finances and bad credit, you are in trouble. You have to find a way to crawl out of this mess. Read on to learn how to fix credit. The tips will also help you get your financial life together.

Fix The Errors In Your Credit Report

Your credit report has errors. That statement is most likely true because more than 80% of credit reports have errors in them. Request your own credit report from each of the three major credit reporting agencies (TransUnion, Equifax and Experian). Check for any discrepancies, as there is an 80% chance that your credit report has one. Get such errors corrected. Getting the errors corrected alone can improve your credit score (at least) by a few points.

You will need to talk to lenders, credit card companies, etc where you have accounts. Notify them about the errors in your credit report. It is their responsibility to correct any errors or omissions.

Pay Down Credit Card Debt

It is very bad to have credit card debt. It will ruin your credit history and eat away your finances. In other words, you pay exorbitant fees, high interest and still don’t get anything in return. So, if you have credit card debt, pay it down.

If you think your credit card debt is too big for you to repay, ask for viable repayment terms. If you make a promise of repayment of debts, the credit card companies are likely to turn the debt into an instalment loan, which you can repay. However, make sure you can repay such a loan without any defaults. If you default, it will further ruin your credit.

You can also look for loan consolidation or balance transfer. Whatever option you choose, make sure you can duly repay your debts.

Don’t Close Credit Card Accounts

Shutting down credit cards have negative effects on your credit history. Pay off the debts, but don’t close any credit cards. If you close a credit card, it will show as reduction in credit available to you. In fact, you want to increase available credit limit to be able to increase your credit score.

Pay All Your Loans

It is important you pay off all your debts. This is not only for bad credit repair, but also for your own finances. If you default on your payments, it negatively affects your credit score. It also causes big losses in the form of late payment charges, interest charges, etc. In other words, defaulting on loan payments works against you in more ways than one. Immediate monetary losses and black marks on your credit report are the results. Now you know what to do to repair credit and to build your financial future.

If you think your debts are overwhelming, try debt snowballing. It is a method of attacking your debts, one at a time. Write down all your debts. Make maximum possible payments to the smallest debt at first. Pay only minimum monthly payments for all other loans and debts. If you have a windfall, use the money to pay off the smallest loan. Once you repay the smallest loan, tackle the next smallest one. Continue this cycle until all your debts are repaid.

Pay As Agreed

This is the most important phrase in your financial life.

When you subscribe to a cell phone plan, make sure you pay your bills on time.

When you take a loan, make the monthly payments as agreed.

Make sure you pay your monthly bills (electricity, cable TV, gas connection, etc).

If you pay as agreed, it will improve your credit ratings. In addition, you will also don’t have to pay late payment charges, unwanted interest charges, etc. If you pay your bills on time, it gives you double benefits – strengthens your finances and helps you fix credit history.

Follow These Two Simple Rules To Build Credit And To Improve Your Finances:

1.  Don’t Purchase What You Can’t Afford
2.  Don’t Take Loans You Can’t Repay

Follow those two rules. Your finances will always be in a strong position. Your credit score will always remain healthy. And, you can always qualify for personal loans, car loans and home loans at low interest rates.

A Simple Trick To Boost Your Credit Ratings Fast

Increase available credit limit. This is one trick to boost your credit score. Ask your credit card companies to increase your credit limit. They will do this if you have good credit standings for the past one year. The increase in revolving credit available to you will be viewed as better confidence in your repaying capacity. It will boost your credit score.

However, if you open many credit cards, it will negatively affect your credit ratings. This is because the credit reporting agencies will think you have been applying for fresh credit.

This is all you want to keep your finances on track. Just remember to pay any bills and debts as you have agreed. And, always make sure you don’t purchase what you can’t afford. Good finance is not about tricks and tips, it is about the habit of prudential spending habits.

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