Having bad credit can be detrimental to your financing and places several hurdles in front of you when it comes to availing loans. Having a poor credit score can happen to anyone, and for several reasons, ranging from not paying debts off on time, to missing payments. Luckily, there are ways that you can go about improving your credit score.
6 Tips To Improve Your Credit Score:
1. Paying Your Bills On Time
This is by far the most obvious way to improve your credit score yet is still worth mentioning. It doesn’t matter if you’re only a few weeks late or a few months late, paying your bills late will result in a lower credit score.
2. Paying Down Your Debt
This is tricky because you want to have debts paid off almost to its entirety, but not completely. Your credit score is a reflection of how well you manage your credit, but if you pay off your debt completely you have no credit. The best way to approach this is to pay off most of your debt but leave a little extra to manage.
3. Amount & Variety of Credit Cards
Similar to paying off your debt is showing that you can manage different types of credit cards. This is not to say that you should have 10 different credit cards but having a few different kinds will improve your credit score. Having a Visa, MasterCard, Target card and/or gas card will show that you can manage short-term and long-term credit cards.
4. New Credit
Unless it is completely necessary, it is vital that you stay away from getting any kind of new credit. Every time you get new credit an inquiry is added to your report, which drops your credit score to some degree.
5. Bankruptcy & Foreclosure
Filing for either of these can kill your credit score because they stay on your credit report for 10 years. Not only that, but they also decrease your credit score over time. The good news is the closer you get to the end of your 10 years, the less of an impact it has on your credit score.
6. Deleting Errors
This is the quickest and most efficient method to correcting any errors from your credit report and raising your credit score. There is a lot of paperwork that is required to do this, but it will save you the hassle of having to deal with much more later on.
No matter how you decide to improve your credit score, it is vital that you get a jump on it as soon as possible. Having a bad credit score can make life more difficult, because when need to borrow money, it will be more difficult for you to get approved for a loan, and you will have to pay a higher interest rate.
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