6 Steps to Repair Your Bad Credit

Living with bad credit is not easy, since it will make a lot of things difficult and more expensive. In some cases, it will even make certain things impossible. By repairing your bad credit, you will be able to qualify for lower interest rates and better terms. If your credit is bad, then you might not be able to get approved for products like credit cards. Although you probably could take out a mortgage or car loan, you’ll end up paying a higher interest rate due to your credit score.

Review Your Credit Reports

Before you actually start fixing your credit, you will first need to review your credit reports. By doing this, you will see exactly which decisions have caused you to have bad credit. Basically, you’ll see exactly which items are negatively affecting your score. Keep in mind that all three credit bureaus are supposed to give you a copy of your report for free each year. All that you have to do is simply request the copy.

Dispute Errors

If you find any errors on your credit report, then you should dispute them immediately. Although you probably won’t find them very often, they can happen from time to time. Even if you notice any small errors, it’s still a good idea to clean them up. Once you notice an error, you should highlight the error on a copy of the report. After doing this, you’ll need to gather some proof that there was an error on your report. To get proof, you will have to gather your bank account statements send copies of them to a credit bureau.

Take Care of Past Due Accounts

Your credit history is without a doubt the most important factor when it comes to your score. This means that you will need to take care of your past due accounts if you want to improve your score. If you have past due accounts that have yet to be charged-off, then you should tackle them instantly. Whenever you have a payment that is at least 180 days past due, it will become charged-off, which is without a doubt one of the worst account statuses.

Paying charge-offs is very important, since they can make it very hard for your to get approved for new loans and credit. If you have enough money to pay the charge-off in full, then you should do it. If you have less than you need, consider getting in contact with the creditor and negotiating a settlement. In some cases, the creditor might accept and cancel the rest of the debt.

Choose a Credit Repair Service

If you’re finding it hard to repair your credit score, then maybe you should consider letting professionals do the job for you. There are a lot of good credit repair services that will check your report and find ways to improve your score. One good thing about these services is that they have a great understanding of how credit works, so they’ll probably come up with a few ways to help you fix it.

Increase Your Credit Limits

The ratio of available credit and credit used greatly impacts your credit score. Although you could improve your score by paying down your balances, another way to do this is to increase your credit limits. All that you’ll need to do in order to increase your limit is call your credit card company and ask them. If they determine that your payment history is decent, they will gladly do it. However, it’s very important not to actually spend that additional available credit.

Improve Your Habits

The only way to make sure your credit stays good after you fix it is to improve your habits. Make sure you properly understand which decisions led to your bad credit and avoid making the same mistakes.