Credit can impact many aspects of your life. Your credit score impacts where you can afford to live, how much you can borrow, and even how employers perceive you.
Credit scores are indicators of how likely you are to repay a loan over time. A good credit score typically ranges between 670 and 739. Having a good credit score can get you higher credit limits and lower interest rates.
If you have a low credit score, your financial opportunities will be limited. Keep reading to learn five tips for bad credit repair.
1. Routinely Review Credit Reports
Your credit report is used to calculate your credit score. These reports allow creditors to keep track of your credit history. Credit bureaus and certain credit card companies give out free copies of your credit report.
Routinely reviewing your credit report allows you to analyze your habits and create a plan of action to improve your credit score. Additionally checking your credit score, can provide you with an early alert that you are the victim of identity theft.
2. Don’t Be Afraid to File Disputes
When you check in on your credit reports, you have the opportunity to dispute negative marks or late entries. Negative marks on collection accounts can immediately tank your credit score.
You can file disputes through a credit bureau or directly with your creditor. According to the Federal Trade Commission one in every four people had errors on their credit report. Speaking up to address any incorrect marks head-on can help you salvage your score.
3. Increase Credit Limits
Your credit card utilization plays a major factor in your credit score. Having a balance that is close to your monthly limit can strain your score. Maxing out your cards will hurt your score, so if you are unable to adjust your spending habits you should opt for a higher credit limit.
4. Pay Down Outstanding Balances
If you are unable to increase your credit limits, you can improve your limit to balance ratio by paying down your balances. Paying down your balances may not be possible as a quick-fix.
You may need to apply for loans with bad credit, if you want to pay down your outstanding lines of credit. All of your debts are connected, so any robust payment can reduce your credit utilization ratio. Even if you aren’t financially savvy, if you can slowly pay down your balance, you can improve your credit score.
5. Consolidate Your Debts
By funneling all of your monthly payments to line of debt you can streamline your finances. Strategically consolidating your debts into a single loan or account allows you to pay off high-interest accounts first. Cutting down on high-interest accounts, can reduce your monthly payment.
Conquer Bad Credit Repair Today
If you struggle with finances, you should actively pursue bad credit repair. The only way to maintain a strong credit history is to build positive spending and lending habits. The realm of finances and credit is riddled with false promises.
Liked this article? Connect with us to read more like it.