Tips

3 Important Tips To Repair Bad Credit

repair bad credit score

In these troubling financial times, having a bad credit score can add to your financial woes. Bad credit equates to financial insecurity and having an otherwise avoidable drain on one’s financial resources. Due to the advancement in technology, all sectors have become interlinked. Your financials matter now more than ever. But the good news is you can repair bad credit score.

More and more companies check your credit score before offering their services. 

Having a bad credit score invites unnecessary trouble. Banks issue loans on a higher interest rate. Utility providers ask for a security deposit if you have bad credit.  Insurance companies charge higher interest if you have bad credit.  

To avoid these problems, you must improve your credit or maintain if you already have a good one. There is no quick fix for improving bad credit. Having good credit requires a long term effort and constant vigilance. Let us see what steps you can take to improve your credit: 

Periodically Review Your Credit Report 

  • The first step to fixing a problem is to analyze it and then take corrective action. In order to fix your credit score, the first step should be a review and analysis of your credit report.  

credit report is the equivalent of an academic report card. It outlines your credit history and maintains a record of credit activity. Were your loan repayments on time? It’s all in the credit report.  Analyzing the credit report will help you understand where the problem lies.   

  • Reviewing the credit report is also essential to identify reporting mistakes. It is possible that you made timely payment to your mortgage lender, but it was reported as a late payment. This will reflect badly on your credit score. You should clarify any similar errors in your report.  

You can get a copy of credit report from credit bureaus such as TransUnion, Equifax and Experian. 

Maintain a Balanced Credit Card Utilization Ratio 

  • The credit card utilization ratio is a correlation between available credit to credit which has been utilized. If you have used more than 50 percent of available credit, it will impact your credit score negatively. For e.g. if your credit limit is US $6,000 and you have utilized more than $3,000 then you are in the dangerous zone. 

There are two ways to balance the tips to get a higher utilization ratio: 

  • Reduce spending and pay down the balances 
  • Increase the available credit by extending your credit limit 

To do the latter, you have to contact the credit card company to increase your credit limit. In most cases, the lender obliges because issuing a higher credit limit benefits them in the long run. Make sure to not use the added credit. This action is only taken to improve your credit score.  

Clear Outstanding Balances 

  • Swallow the bitter pill and pay outstanding balances, once and for all. This will reduce the amount of used credit and will improve the utilization ratio. If the balances are cleared, your credit score will see a quick improvement.  

Once a better credit score is achieved, you will receive loans on much lower interest rates. In the long run, clearing outstanding balances will save you money which would otherwise be paid to lenders. 

If you want a quick improvement in credit score, we recommend you contact a professional company that offers credit repair services. Credit Repair Today is just the company you need. They provide hassle-free credit restoration services throughout USA.  

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