Methods on How to Fix Your Credit

02
October

Your credit score is one of the most important factors in your financial life. Many people don’t give it the credit that it deserves in playing a role in your finances. It not only affects how much money you pay in loan interest rates and determines whether you can be approved for financing, it also affects other areas of your life like insurance premiums and deposits. If your credit score has been negatively affected by the financial decisions that you have made in the past, there are steps that you can take to boost your credit score again. By implementing some of these methods, you can hope to raise your score and start saving money on interest rates, insurance premiums and deposits again in the future.

Paying Down Balances

If you are interested in fixing your credit score, one of the best things that you can do is pay off or pay down your credit cards and other accounts. For instance, if you have balances sitting on credit card accounts, store accounts and other accounts, pay them down as low as you can. If you can get the balances down to below about one third of what is available to you, this will boost your score. Make every effort to pay down your balances as quickly as possible.

Start Making Regular Payments

The most important factor in the eyes of the credit bureaus is your payment history. The credit bureaus look at how many payments you have missed or made late. For each one of these, your credit score will be lowered. Over a third of your credit score is comprised of this single factor. This means that if you start making your payments on time, every time, your score is going to be boosted. This can take some time to make a difference with your credit score, but it will be boosted a little bit every time you make a payment.

Fix Any Errors

When you are interested in boosting your score, you need to get a copy of your credit report from all of the big credit bureaus. Once you have a copy of your report from all of these credit bureaus, you can start to analyze them in detail. Look for any errors that you can find on the reports. If you find any accounts that you did not open, you can report this information to the credit bureaus and get the situation fixed. You can also see if any of the accounts have incorrect balances or payment information. Look for any discrepancies that you can find on your reports and then contact the bureaus to have them corrected.

Caution

When you are interested in fixing your credit score, you may be tempted to hire one of the many companies claiming that they can fix your credit. Many companies make unbelievable claims such as “We can remove bankruptcies and judgments from your credit report.” If you hear any of these claims, you should definitely stay away from the companies that are making them. No company can remove judgments or bankruptcies from your credit report. Some companies out there do scan through your credit report for errors and help you get the issues addressed. However, this is something that you can do on your own with little bit of work.

Another option to consider is hiring a credit monitoring service. With a credit monitoring service, the company will watch your credit reports for you and alert you if anything changes. This makes it impossible for identity thieves to open accounts in your name.

Regardless of which methods you choose to employ, don’t expect results overnight. The process of rebuilding your credit will take some time to complete.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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