When checking your credit score, you might be alarmed if you see that it is lower than you would hope. A credit score is one of the most important financial numbers, as it can often determine whether or not a person gets granted a loan, and what type of interest rate they will receive on that loan. If your score is low, then you are going to want to do everything you can to improve it.
This might seem like a daunting task, but there are plenty of baby steps that will help out and repair your credit. These steps allow you to slowly build up to a good score. With a better credit score, there are fewer worries about getting denied for something because of low credit.
The first step is to request your credit report, which you can obtain for free from annualcreditreport.com. This will allow you to see everything that is showing up on your report and make sure there are no errors. Correct credit report errors as soon as possible if there are any in the report. If there is something negative and untrue on the report, then you need to work to get that off your report. If it is negative and true, see if there is anyone that you can rectify it with to remove it from the report. This is the first step that should be taken, and the most likely to be a quicker fix.
Next, make sure that you are paying all of your bills on time. Making late payments or missing payments is a quick way to ensure that your credit score will not be boosted because it seems as though you are not trustworthy to creditors. If you need to, set up some type of calendar reminder or automatic bill pay to make sure that everything is paid on time. This is an easy way to slowly build back credit and become trustworthy in the eyes of those that could potentially give you credit.
Another important thing is to pay down debts, especially credit card debts. Since credit utilization percentage is a part of the credit score formula, having a high percentage of debt in comparison to total amount of credit will really hurt. If needed, cut up your credit cards so that the debt doesn’t increase, and make sure that the payments are going out. If possible, pay more than the minimum to pay down the debt faster. This will allow you some breathing room in your credit utilization, which will help your credit score.
There usually are not any quick fixes when it comes to boosting your credit score, but there are a lot of baby steps that you can take; these steps will eventually lead to a higher score. While improving a score can seem like a daunting task, it becomes a lot easier when you are able to break out the things that will have the biggest effect and biggest impact on your score. If you take these three baby steps, things will get a lot better, even if it does take a little bit of time.