Having a good credit score of 700 - 850 comes with its benefits. Great credit affords increased opportunities such as getting an ideal mortgage, refinancing rates and negotiating power when applying for a personal or business loan. Credit scores reflect your financial responsibility and accountability.
Use these tips to repair a bad score.
- Check your credit report. Always get a report on your credit each year to check for negative inquiries you may have on your account. Note any mistakes on it and fix the problems by writing a letter to the credit bureau and reporting company to dispute them.
- Pay your bills on time. If you need to set up automatic payments, do so.
- Lower your debt-to-credit ratio. Try to do this quickly.
- Pay off debt. Get a handle on your monthly budget that includes making payments on debts. Read 4 Helpful Tips to Avoid Overspending.
- Get current on missed payments. Catch up on late payments. However, do not forget to pay off the current balance too. Once, you are in good standing, continue to pay your bills on time.
- Call your creditors. Are you having financial difficulties? If so, contact your creditors immediately to let them know of your circumstance.
- Apply for new credit only as needed. Do not establish new credit accounts to move debt around or just to have accounts open. Be responsible and manage accounts promptly by paying any outstanding debt.
- Keep balances low on “revolving credit.” The more outstanding debt that you have can affect your credit score. This step also applies to credit cards.
- Do not close unused credit cards. You will not increase your credit score. Instead, keeping credit cards open and paid off help to boost your standing.
- Refrain from using your credit cards. It is best to use no more than 30% of the credit to pay for bills or purchases. Read 20 Ways to Make the Most of Your Money.
Repairing your credit score is important. Apply these tips above to help improve it.