There are many ways to fix your credit scores. However, if you don’t know how to use these tips and tricks, you could make your score worse instead of improving it.
First you will need to understand how a credit score works. There are three Credit Reporting Bureaus that keep track of all money that you borrow, how much debt you have, the type of credit you have, and your repayment history. All of these factors are then calculated to give a single score.
Banks and other lends use this score to determine if you are a good financial risk. The score is an indicator of you well you handle your responsibilities. A lower score indicates that you have had some financial problems at some point in the past. Some banks will surely not approve your loans but other options may be considered such as looking for other financial institutions that offer a debt consolidation loan quote.
If you need to fix your credit score, here are some easy tips to help raise your score.
1. Get a copy of your credit report: Before you can fix your credit score, you need to know what is wrong with it. You can get a free copy of your credit report from all three credit bureaus. Once you know what is negatively affecting your credit score, you can begin to fix it.
2. Remove inaccurate information: Mistakes do happen, so if you notice a mistake on your report, make a note of it.
3. Pay off old debts: If you have old debt that is unpaid or have missed payments, try to negotiate a debt payment plan with the lender. You might be able to save a lot of money in interest payments. You can also try to agree on a repayment plan to help you get back on track.
4. Negotiate a plan to pay off debt: If you cannot pay off overdue payments, call the lender immediately to work out a payment plan. Make sure this is realistic for you and that it fits your budget.
5. Frequency of repayment: A large portion of your credit score is based on your history of repayment, so it’s important to make payments on time. To avoid making late payments, consider making multiple payments each month. If you get paid every week, make 1/4 of your payment with each paycheck.
6. Re-structure your debt: Thirty percent of your score is based on outstanding balances and your available credit. Moving debt around isn’t a good idea, however as you pay off your loans your score will improve.
7. Don’t get more credit: When you are trying to fix your credit score, do not get more credit. If you can’t afford to buy something, save your cash instead of turning to credit.
8. Mix your plans: You can mix and match these tips to suit each type of credit you have and your budget. Once you get started, it won’t take long to get control of your finances again.