When it comes to fixing bad credit, it is not an overnight fix. If you find yourself looking for a quick fix, you are more prone to experiencing a negative impact on your credit. So, be mindful of any guidance that promises to boost your credit score quickly. The best place to start when it comes to restoring your credit is to access your free annual credit report and go through it with a fine toothed comb. After that, there are steps to take to help restore your credit back to good standing.
Techniques To Carry out Right Now
If you have not already, obtain a zero cost copy of your credit documents and review them for mistakes. According to the FTC, 1 in 5 consumers find errors on their reports. Your credit report includes all the details used to determine your rating and it might in fact contain errors. As you go through your credit report, make sure that there aren’t any late payments erroneously recorded. You also want to take a look at your balances for each account to ensure that they are correct. If you discover mistakes on your reports, challenge them with the credit bureau.
Here is what to look out for on your credit report:
- Incorrect personal information (address, phone number, birthdate etc.)
- How many open accounts are listed and what types of open credit accounts you have.
- Any accounts that have gone to collections
- Check for any recent hard and soft credit inquiries
Lower Your Debt
Timely payments is one of the most significant aspects to your credit ratings. Many banks provide payment reminders that they will send you via a text message or email. The next important step to take, is to decrease the amount of debt you owe. By lowering the amount you owe, you will help increase your credit score. Try your best to not use your credit cards and if you can’t make more than the minimum payments each month, the important thing is that you make timely payments. In addition, owing the same debt but having a reduced number of open accounts on your report may decrease your rating. Don’t eliminate untouched credit cards as a brief approach to boost your ratings. Also, you do not want to open brand-new credit cards to enhance your obtainable credit. This tactic could backfire and actually reduce your credit scores.
Your credit utilization rate should not exceed 30% of your total credit limit. If you want to keep your credit score high, you will want to make sure your rate is 20% or below.
Here are some steps you can take to lower your credit utilization:
- Call your credit card company and see if they will lower your interest rates.
- Request a credit limit increase on your existing cards.
- Do not acquire new debt.
- Start paying down your current debt by focusing on accounts that have the highest interest.
Double Up On Your Credit Card Payments
When it comes to your credit, it is key that you use as little of your available credit as possible each month. Creditors have a report date each month and in an effort to ensure your balance is as low as possible, double up on your payments each month.
Here is how this will benefit you:
- The amount reported to the credit bureau will be lower.
- You will avoid interest and fees
- Paying twice a month will help you pay your balance in full.
Her is how it works:
If you have a $1,000 dollar limit on your credit cards and you put $700 dollars worth of bills on the card each month, your due date on the card is key. If you pay it off by the due date of the 21st but the credit cards closing date is the 17th , each month you are signaling to the bureaus that you’re holding balance of $700 each month. That is not the best thing. When doubling up on your payments, you will ensure that you are making a payment before the reporting date which will help ensure that the agencies are being given the lowest balance possible. Then, you make your second payment by the due date, which should cover the rest of your balance. No interest fees!
Hire a Professional Credit Repair Service
Finding a reputable credit repair company to help restore your credit can be key depending how your credit looks. The right credit repair company will have years of experience and insider knowledge on credit law. If you have errors on your report that you know should not be there, hiring a credit repair professional can be key. The credit repair process is long and arduous and without essential credit law knowledge, you may be in over your head.