Our credit record reflects our character and reputation when it comes to a car loan or home loan applications. We all aim to have a good credit score. A good credit score helps you with your future loans. If you have a bad credit score, lenders and credit card-issuing banks will most likely deny your loan applications. If you do not have your credit score repaired now, then you will likely yearn you had when comes the time you need it.
Maintaining a good credit score seems easy. You only have to pay your bills on time. It is as simple as that. But let’s be honest, most of us forget to pay on time and sometimes we even don’t pay the bills at all due to financial reasons. Because of these mistakes, we end up having a bad credit score. So, what are the things that we need to do to fix our credit? Here are some useful tips to help you clean up your bad credit history.
Look at Your Credit Report
What is a credit report? A credit report contains your credit history. It has all your credit activity in the past as well as your current credit status. Before you proceed to all the rest of the steps of repairing your credit, you must first look at your credit report and see what needs fixing. Here, you will see your past-due accounts, credit card balances, debt collections, and other factors that are contributing to your bad credit history.
Know that the law states that you are entitled to get a free credit report every year. Ask from any credit reporting companies to get your report. Now that you have your credit history, you can now start repairing it.
Don’t Be Afraid to Dispute Negative Marks
Although rare, there are times that your lenders or creditors commit mistakes and have errors in their system that even if you had paid, your provider claims you had not. This will eventually lead to having a collection account. Get rid of these negative marks on your credit score by using a service that lets you dispute errors online. Below is a list of factors that hurt your credit score.
- Late payments
- No payments at all
- Charged off account
- Collection account
- Court Judgement
- Maxed out credit card
Dispute One Item at a Time
If you dispute too many items on your credit report at the same time, it might sound suspicious to them. Spread out your disputes and focus on one item in each dispute letter.
Get a New Credit Card
Getting a new credit card helps with improving your credit score. It will increase the credit card utilization ratio. Remember that you only need to open a new credit card. You should not put any balance on it. The goal is to repair your credit, not to increase your debts.
Learn What Hurts your Credit Score
Knowing what hurts your credit score lets you avoid further damage to your credit score. Do all you can to have a good credit score. If you think you need help with repairing your credit, don’t be shy to get help. You might want to consider hiring a consumer credit counseling agency. They have more knowledge and solutions for your credit situation.