Do you know what makes up your credit score?
The biggest factor that impacts your credit score is your payment history. If there are late payments in your credit report, your score will likely take a hit. Other factors that can affect your credit score include the amounts you owe, the age and diversity of your accounts, and hard inquiries.
Of course, even if you don’t know the exact components that make up your credit score, you should try to avoid having bad credit. If you already do, though, credit repair can help bring your score up.
Don’t forget that the higher your credit score, the higher your chances of getting approved for loans—and you’ll get better interest rates too.
That being said, let’s talk about the ways you can improve your credit.
First Things First: There’s No Such Thing as Fast Credit Repair
Even if you start paying your bills on time and try to be prudent about your credit card spending, it takes at least 3 to 6 months before you see improvements in your credit score.
Now, if you have no credit, it’s also good to remember that repairing a bad credit score takes a lot longer than building one. That means if you’re working to build your credit, you should make sure to keep it that way.
Otherwise, if you have a bad credit score, accept that it will take time before it goes up. And when it does, try your best to keep improving it until you reach a score of 750 and above (excellent credit).
Some Ways to Improve Your Credit Score
Aside from paying your bills on time and tracking your spending, the best ways to repair your credit include:
- Paying More Than the Minimum
If you can pay more than once in a billing cycle, do it. Take note that you should try to do this not just for your bills, but also for your outstanding debt balances.
When you pay more than the minimum you lower your credit utilization rate, which compares the amount of money that you owe to your total available credit. Keep in mind that those with low credit utilization will most likely have a higher credit score.
- Dispute Errors on Your Credit Report
Even small errors such as wrong spelling in your address can have an impact on your credit score. So once you obtain a copy of your credit report, try to review everything.
Check every detail from your identity information to your list of accounts, outstanding debts, and major purchases. If there are discrepancies, highlight them, then send them to credit bureaus so they can correct those errors.
- Consider Quick Loans
Though some are determined to repair their credit, there may be circumstances that prevent them from paying their debts on time. For example, a medical emergency or job loss can make it impossible for some to pay bills and other debts.
If this is your problem, you can shop around for quick loans. These are guaranteed loans that even those with bad credit can apply for.
As long as you pay on time, it can have a positive impact on your credit report.
Want More Personal Finance Tips and Advice?
Now that you know the importance of credit repair and some tips for going about it, don’t stop here. Continue to improve yourself financially to avoid ending up in a credit card bankruptcy. But even if you do, you can engage a credit card bankruptcy attorney to settle it for you.
There are other ways to improve your credit score such as not applying for new credit, debt consolidation, and so on. For more information on personal finance, check out our other posts.