Repairing and improving your credit score is one of the smartest things you can do, but it’s not easy, and it takes time. If you are going about it the right way you can fix a credit score in about six months, there is no quick fix for having bad credit. After all, it took you years to create the credit problems you have so you cannot expect to correct it quickly. If you want to learn how to repair your credit the right way, then check out these tips we’ve provided for improving your credit score.
Check Your Credit Report
First, get your credit reports. If you want to improve your actual credit rating, then you need to visit the three major credit-reporting agencies: Transunion, Equifax, and Experian. Collect your credit reports from each of these three agencies and verify the credit accounts listed in the reports are accurate and that the items in the report are not more than seven years old. If you find old accounts, accounts that you do not recognize or accounts containing errors, then send a certified letter to the agency detailing why you wish to dispute the records they have. If the agency agrees with your disputes, they will remove the accounts, and it will improve your credit score.
Now that you know how to get your credit scores and dispute accounts listed in the reports you need to understand how credit works. Credit is a catch 22, you cannot get credit without having credit, and you must actively work towards improving it. So how does it work? Your credit score is a number that tells a creditor how trustworthy you are with credit. Credit scores are factored using several pieces of data about your credit history. These pieces of data typically consist of how much debt you have, the standing of those debt accounts, the percentage of credit used vs. the credit available, and the age of the accounts. Think about your credit as you would your resume. Applying for a loan is a lot like applying for a job, you would not expect to get hired at a job you had no experience doing right? So you can imagine how hard it would be to have an excellent credit rating if you do not have good credit accounts.
Reduce the Debt You Owe and Manage Credit Cards
So how do you get good credit accounts? If you have credit cards, you need to make sure that you are using them wisely. If your existing cards have built up a lot of interest, you will want to consider closing those accounts and trying to consolidate them with a loan at a lower interest rate.
Find a good credit card that can help you build your credit rating. ONLY use your credit card for things that you already purchase every month. Many credit cards available offer rewards for purchases such as groceries and gas, these rewards usually come in the form of a one to five percent cash back reward. If you use the card frequently, the cash earned back more than pays for the annual service fee of the credit card. Make sure to pay off the balance twice a month so that you never accrue interest on the card and you never miss a payment.
There you have it a solid plan for understanding your credit score and how to improve it. If you are looking for a home then check out our list of rent-to-own homes available in your area.