How to Recover a Good Credit Score

How and Why You Want Increase Your Credit Score

Are you looking to buy a new car because you have a new bundle of joy coming in 9 months, but you cannot get a loan because of poor credit? If you are in this situation, you can improve your credit score in a relatively short period of time. This is due to the fact that the factors affecting your credit score are within your control. The one issue is that this will take some work on your end.

Of course, it is important to be realistic when looking at quickly improving your credit score. After all, you will not be able to see a difference tomorrow, but you can turn your credit around in a relatively short amount of time. This will usually be around 1 year depending on the start health of the score. When you show that you can be diligent with your spending and debt repayments, you will have a better chance of showing that you are a low-risk customer.

Request A Copy Of Your Credit Report

Before you do anything, you need to get a copy of your credit report and this can be requested from the credit bureaus. To do this, you will need to send them some basic information and then wait for 2 to 3 weeks for the report to arrive in the mail. If you are willing to pay a small fee, you will be able to get your credit report online.

The 3 digit credit score is the most important number in your report and will tell you the overall health of your credit. The report will include additional information about certain accounts which can be a little overwhelming to sift through if you do not know what to look for. There are a number of explainers that you can use which will help you with this.

Improving Your Credit Score

9 Steps To Quickly Improve Your Credit Score

Leave Your Old Debts On The Credit Report

It is impossible for you to improve your credit score if you have no credit to start with. Young people and those new to the country often have this issue because they are just starting to establish themselves. This is why you should look at keeping old credit accounts open because the longer your history of responsible credit use, the better it looks. Having old debt which has been paid off as agreed will help you boost your overall credit score.

Correct Errors In Your Credit Report

You should be looking at your credit report at least once per year to ensure that everything on it is correct. If you see errors or incorrect information, you will need to contact the credit bureaus and ask for a correction. Errors could be someone else’s information in your report, debts that are not yours being listed and debts that have been paid off in full with incorrect payment history.

Increase Your Credit Limit

There are a lot of people who view increasing their credit limit as only a means of enabling them to spend more. This is not completely true. Increasing your credit limits can have a number of upsides if you manage the use of the limit correctly. Mainly, doing this will lower your overall credit utilization which will improve your credit score, particularly if you are making your payments on time.

Pay Your Bills On Time

Punctuality is vital when it comes to paying your bills and repairing your credit. Approximately 35% of your credit score is made up of your payment history. If you are constantly making late payments on your loans and credit cards, your score will be taking a big hit.

Set Up Automatic Payments

If your credit score is taking a hit from late or missed payments, you should consider setting up automatic payments for the debts that have a fixed payment date. This will include personal loans, student loans, car loans, and your mortgage. By doing this, you will never forget to make a payment against and this will improve your credit score.

Use Your Credit More

A lot of people assume that this will be counter-productive, but is it actually one of the best ways to repair your credit score. Your credit is built on your use of credit and your ability to pay it back responsibly as it shows you can manage your finances. You should look at continuing to use your credit as long as you know you will be able to repay it on time.

Open A Secured Credit Card Account

One of the ways that you can build credit history is to open a secured credit card account. This is an account which requires you to make a deposit upfront and can be used like a normal credit card. This is a good option for people with no credit history or a poor credit score who have a hard time getting a traditional credit card or loan.

Keep Your Credit Card Balance Low

It is not a good idea to keep a high balance on your credit cards. Maxing out your cards each month and not paying them off will affect your credit score because the credit you use will be compared to the credit you have available. A good rule is to keep your credit use to less than 30% of your available credit. This means that a credit card with a limit of $2500 should only be used up to $750 in a month.

Monitor And Request A Copy Of Your Credit Score

You will be able to get a free credit report from the credit bureaus. All you need to do is send them some basic information and then wait for them to send your report in the mail. For a small fee, you will be able to get instant access to the report.

You need to get your credit report to monitor the changes and to ensure that everything is correct. The credit bureaus will often have guides that you can use to help you determine what the report states and how this affects your score.

When you have a good understanding of what your credit score is, you will have a good idea of what you need to do to make it better. There are a number of steps that you can take to try and quickly turn your credit score around. Of course, you will need to be realistic in the timeframe that you allow for this because it will vary depending on the starting health of your credit score and how much you want to improve it.

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