Are you stuck sitting in a corner and figuring out how to fix your own bad credit score? Stop worrying yourself, you are not alone. There are other people facing the same problem. Many people have been experiencing this problem, and so we are here to help you.
Fixing your own credit is not as hard as you think it is. It only requires time, determination, and effort. The sooner you start, the faster your score will improve. We will tell you the easy steps on how to fix bad credit.
Step 1. Request a credit report.
You are entitled to get a free national credit report once a year from the three major credit bureaus ( Experian, Equifax, and TransUnion ).
To get a copy of your credit report, you can visit their website at www.annualcreditreport.com or by calling 1-877-322-8228.
Step 2. Dispute any errors.
Once you get a copy of your credit report from the credit bureau, review every single detail, from your personal information, payments history, outstanding balances, transaction history, and all the stuff that needs to be reviewed.
Write a dispute letter as early as possible. You do not want things to get worse and complicated, prepare all the documents you need for disputing errors.
Step 3. Pay all bills on time consistently.
This will help you to improve and repair your own credit score. Payment history has a 35 percent portion in your credit score ratings. Meaning, if you failed to make payments on time, it will negatively impact your credit score. But if you consistently manage to pay your bill on time, your score will stay on top.
Step 4. Keep Credit Utilization low.
Credit Utilization is the amount of credit that you are currently using divided by the total amount of credit you have. You need to use a maximum of 30 percent of your credit limit. So if you have a $4,000 credit limit in your account, and you have spent used $400, then your credit utilization ratio is 10 percent, which is good for your credit score health.
Step 5. Pay credit card balances.
Make sure you are not spending too much or spending more than what you are earning monthly. If you have a balance on your credit card, start to pay little by little until it is gone.
Step 6. Apply for new credit only as needed.
Opening a new line of credit can help you increase your credit limit but it does not mean that it can not affect your credit rating. Before you apply for new credit, better make sure that you will get approve because hard inquiries can affect your credit score.
Why do we need a high credit score?
A credit score is not just a number but it is a part of your financial status. It will be difficult for you to find a lender if you have a bad or low credit score. Lenders or Banks are into the high score, a high score means you are a responsible payer or you can manage your credit well.
For instance that you want to buy a car, a house, a new credit card, any type of loan, a personal loan, student loan, or even getting on a job, you will definitely be needing a high credit score in order to get those or enjoy an affordable interest rate.
Have you ever imagine yourself having a high credit score rating? And enjoying the benefits and financial freedom? Not worrying about your personal loans, or monthly payments because you have an affordable interest rate?
Do not lose hope if you are still on the same page of your problem, it takes a lot of time and effort to get things back on track. Trust yourself and trust the process.