Ok, so now you know What Credit Is and Why You Should Care. Hopefully you’ve learned some things and you now want to know how to repair your credit. First you have to want to repair your credit. This is huge, because many people don’t want to put in the work to clean up their credit. If you’re ready for the work, you have to be committed to following through.
Tip 1 to Fix My Credit Score Now: Establish a History
One of the factors that impacts your credit score is the length of time your credit history has been in existence. This one is a little unfair (in my opinion) because you can’t control it. You can’t start establishing a credit history until you’re 18 and it takes years to be classified as “good” in this category. This means you need to open up a few credit cards ASAP and keep them open and in good standing.
If there is a card you no longer want to use (for example, it has unfavorable terms), instead of closing it, simply store it away or destroy it. Leaving the account open, as long as you aren’t being charged an annual fee, will do you no harm… in fact, it may actually do you some good as it allows you to keep building a credit history.
Tip 2 to Fix My Credit Score Now: Don’t Apply for a Bunch of Loans at One Time
Applying for a lot of different types of loans (ex. credit cards) in a short period of time can lower your credit score… so can opening a several loans in a short period of time (credit card, store credit cards, car loans). This is a pretty easy way to fix your credit score- stop applying for a bunch of loans and opening new accounts.
Tip 3 to Fix My Credit Score Now: Pay Your Bills… On Time
Paying your bills on time is probably one of the easiest ways to improve your credit score. If you have problems remembering to pay certain bills, consider setting up automatic payments so that the money is automatically deducted from your bank account each month. If for some reason this isn’t an option, set up automatic reminders on your calendar.
Tip 4 to Fix My Credit Score Now: Pay Down Debt
Lowering your debt to credit ratio by paying off debt is another way to improve your credit score. Paying your debt off on time (as mentioned above) is critical but if you can, you can also pay off debt ahead of schedule to lower your debt to credit ratio. This doesn’t mean you have to make an extra payment each month or anything that extreme. However, if you have an extra $20 each month, put that towards paying down your debt.
Tip 5 to Fix My Credit Score Now: Check Your Credit Report Regularly
Your credit score is derived from your credit report so you should check your credit report on a regular basis. Familiarize yourself with your credit report so that you can spot mistakes and fraud like identity theft.
You are entitled to 3 free credit reports a year (one from each of the major credit bureaus). You can claim your credit reports here: www.annualcreditreport.com.
Pull a credit report every 4 months and carefully examine it for anything out of place.
In between credit reports, you can use free sites like Credit Karma and Credit Sesame to keep an eye on your credit score. Since these sites are free they don’t provide as much in-depth information as other (paid) services or your credit report but they do give you enough information to make a judgment call about whether you may need to pay to pull your credit report early.
Tip 6 to Fix My Credit Score Now: Negotiate with Collectors
Understand that simply paying off an overdue account won’t automatically remove it from your credit report. If you’re only slightly late, the balance is extremely low, or you’re going to pay the debt off in full, you may be able to negotiate with the collection agency to have the “ding”, so to speak, removed from your credit report. It is important to discuss this with them up front.
Remember, these 6 tips take time and effort. At times you will get frustrated, but remember why you’re cleaning up your credit. You have bigger goals and bigger dreams, and it’s time to move toward accomplishment!
Questions? Call me @ (615) 977-8444 or email whereyoulivetn@gmail.com