How to fix your credit? Walkthrough
Credit rating determines your financial capabilities. You may need funding in different life situations. Maybe you want to buy a car or a house, or you need urgent financial assistance in case of unexpected expenses.
However, if for any reason a credit fix is needed and score is not high enough, then it will be difficult for you to get most types of loans. Many of you may think that this state of affairs can no longer be corrected and bad credit will now be a constant companion of your financial life.
In fact, not everything is lost and taking the situation into your own hands as soon as possible, you can get a positive result with your credit. Find out by reading this article further what you can start doing to fix your loan today.
Learn and understand how credit works
You should really understand that your actions might affect the credit score positively or negatively. Ordinary loans that you take out and repay on time allow your credit rating to grow, no matter what type of loan it is.
When you know that a long-term use of a credit card adds credit points to you, then try not to close your credit cards, but use them longer, if it is not worth the extra cost. It is also worth knowing that the majority of credit companies do not recommend using funds for more than 70% of the limit granted to you. By reducing the balance sheet below 30%, your rating starts to decline.
Also, the frequency of using a credit card will affect your score. If you rarely use it to pay for your purchases, your credit will not grow. If credit fix is needed you should regularly use your credit cards.
Increase credit limit
By increasing the credit line provided by your card vendor, you thereby reduce the share of your debt in the credit limit. If you manage to request a credit limit increase from the lender, you will immediately receive an increase in your credit score.
Having received an increase in the limit and a decrease in the share of debt, make sure that the balance on your credit card does not fall below 30% of the credit line. Despite the fact that you will have additional money, try not to spend too much, so as not to cross this thin line.
Reduce credit card debt to the required amount
Make up the balance on your credit cards so that the balance on each of them reaches an amount greater than the 30% share of the credit limit provided. Even a small replenishment of the balance on your cards will positively affect your credit rating. Gradually bring the balance to this level on all credit cards.
Check your credit report
Check your credit report by getting it from several US credit bureaus. You can get one credit report per year for each of them for free. The credit report displays the number of your loans, the total amount of your debts and the movement of your credit score.
In most types of loans, lenders review your credit reports when they decide to grant you a loan. However, it should be remembered that there may be errors in credit reports.
You can dispute such errors by submitting a relevant application to the credit bureau, in the report of which mistakes were made. Usually such applications are considered within a month. Check to make changes to your credit report.
Make minimum payments on time
Always try to count your strength before taking loans or get credit cards. You must at least repay the minimum payments on your credit cards and do it on time. This will not allow your credit score to decrease, and for timeliness it may even increase. To make it easier for you to make payments on time, try to set up receiving notifications about the time of payment by various means of communication.
Do not mix debts
To reduce the total amount of your debt, you might consider consolidating your debts and transferring the balance, but this will have a bad effect on your credit history. When you aim to increase your credit, try to gradually reduce the debt on each credit card separately.
Do not close your credit cards
If you have several open credit cards, holding of which does not cause additional special expenses for annual maintenance or other expenses, leave them open. The credit rating is also affected by the length of your use of credit cards, so closing a valid card interrupts the length of your credit history and thus lowers your credit rating.
Consult with professionals
For many people, some issues related to credit and its improvement can be quite complex. To influence the status of your credit rating effectively, you need to understand this well, so that you have a clear idea of the credit.
Contact your creditors’ loan specialists, or financial advisers from other specialized companies to understand all the intricacies of improving your credit. After learning how to do this, start to act. The sooner you start to act in the direction of increasing your credit score, the sooner you will get the expected result.
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