Could your credit score use some help? Maybe, you had a hardship in the past and you feel like it will follow you around for life. There are ways make it better on your own. Learn how to fix your credit score so you won’t pay through the nose in the future.
Beware of the claims to be able to fix your credit score overnight for a nominal fee. Most of these are scams that don’t produce any real results. Take advantage of these steps to fix your credit score on your own and watch is go up steadily.
Don’t sit around and feel bad about what you did in the past. It was in the past and what happened could not have happened any differently. It happens to the best of us. Keep in mind that it doesn’t have to be that way forever.
#1 – Where Are You Now With Your Credit Score
The first step to fix your credit score is to find out where you are right now. Everyone can get a free credit report once a year. Get a hold of your full credit report from the three credit bureaus.
Equifax, TransUnion, and Experian
You want to see where you stand with your FICO score or credit score. Find out where you are, where it’s heading right now, and make a plan to get it where you want it to go.
You can get your free credit reports by going to annualcreditreport.com. Also, there is a number you can call. 1-877-322-8228.
Once you get these reports, and I suggest you do, check out the chart below to see where you fit in. Hopefully, this makes you feel a little better about where you stand. If not, don’t worry. I will explain how to fix your credit score going forward.
#2 – Are There Any Errors On Your Report
Now that you have the reports look closely to see if there are any errors. You will want to make sure all of your personal information is correct first.
Check your full name, address and Social Security Number.
Other errors to check for are loans or credit cards on your report that you don’t have, and missed payments you didn’t miss.
If there are any errors you will need to get proof that they are errors. You might be able to prove the errors with your previous bank statements.
Next, write a letter to all 3 of the credit bureaus explaining the errors and ask them nicely to fix them. Provide the proof with the letter and a copy of your report highlighting the error. What you are doing is disputing the report.
You can also go to the FTC (Federal Trade Commission) to get more information about disputing discrepancies from the credit bureaus.
The credit bureaus are allowed 30 days to respond to you from the date that they receive your letter so, don’t waste days getting this together. As you know, it’s important to have a good credit score.
#3 – Pay Down Those High Interest Credit Cards
I know this is easier said than done. Trust me, I have been there. When you look at your credit card statement it looks like a mountain you can never climb. Ideally, you will want your credit usage under 6%.
You have to find a way to get these balances down. Pay a little every week If you have to. When I had high credit debt, I would pay what I could twice a month. It felt like the balance would never budge but, I kept putting as much toward them as I could until the balance was gone.
Another way to deal with the credit card debt is, not to incur more. Most credit cards have an option to lock the card. When you lock the credit card it can’t be used by you or anyone else.
See if your credit card company has this option. Don’t close the account, lock it. If you know you are going to need it for something you can unlock it ahead of time. The point of doing this is so you don’t use it though.
I have one that is always locked because I know I don’t need to use it. This also helps me feel better knowing that no one else can use it in case of Identity theft.
#4 – Don’t Spend More Than You Make
Another one that is easier said than done. If you are in a position of having bad credit it might be time to change your ways. If you find yourself buying more than you can pay for then you are either buying too much or not making enough money. You need a budget.
You may have to change both problems to get where you want to go with your credit score. Find a way to spend less and make more money.
Maybe, this is a good time for you to start the side hustle or online business you have been thinking about.
Related: Multiple Streams of Internet Income
#5 – Pay Your Bills On Time
You don’t get credit for paying your utility bills on time but, not paying them on time can hurt you. If not careful, these bills could be sent to collection which will really cause you to go backward in your credit repair efforts.
Paying loans on time does give you credit with the credit bureaus though. Make sure that all loans like, mortgage, car payments and personal loans are paid on time, every month.
Once you get a positive payment history going your credit score will go up dramatically.
#6 – Don’t Incur Hard Inquiries On Your Credit Report
Don’t fall for new credit card offers! Every time you apply for a credit card or a loan it causes a hard inquiry on your credit report. If you have too many of these within two years it hurts your credit score bad.
These inquiries don’t go away for some time and will really stall your credit score from going up.
Don’t do it! Don’t take the advice that others give about applying for a credit card to fix your credit. This can be a way to increase a credit score by increasing your credit limit but, if your are trying to fix your credit it’s a bad idea.
Use these techniques for how to fix your credit score and get back on the right track.
1. Find out where you are right now with your credit score.
Got to www.anualcreditreport.com, Credit Karma or Credit Sesame
2. Dispute any errors on your credit reports.
Get advice from the FTC then send letters any of the credit bureaus that show an error.
TransUnion – www.transunion.com
Equifax – www.equifax.com
Experian – www.experian.com
3. Pay down credit card balances.
Work hard to get your credit usage down. Try paying something every two weeks or every week.
4. Don’t spend more than you make.
Consider a side hustle or online business with a low start up to make more money.
5. Pay your bills on time every month.
Having a good payment history will do wonders for your credit score.
6. Don’t incur more hard inquiries on your credit report.
Don’t apply for any new credit or loans. This will follow you around for a long time.