How To Fix Your Credit Score
May 16, 2022 | Daniel Dewitt
When it comes to your credit, it is important you do everything you can to keep it at a good level. If you currently have bad credit and are trying to fix credit score, monitoring your credit report, paying your bills, reducing debt, and managing your old credit cards are the most important things that you can do.
Fixing your credit score to improve your finances will require time and patience, but being able to fix credit score is one of the most important things that you can do for your financial health. Here are some tips to help you get started on improving your score today.
7 Tips For How To Fix A Credit Score And Prevent Problems
1. Keep An Eye On Your Credit Report
Your credit report is a record of your credit history for the last ten years. The three major credit bureaus that track your FICO credit score are Experian, TransUnion, and Equifax. Usually, your creditors will report your debts to all three, but this is not always the case.
You should make it a habit to check with each reporting agency. This also includes your credit score. It is important that you keep track of this. To check it on your own, you only have to do a soft inquiry, which will not cause further damage to your credit score. Keep in mind any hard inquiries into your credit can have adverse effects.
2. Dispute Any Credit Report Errors
The information on your credit report should be accurate, but the credit bureaus can still make mistakes sometimes. Therefore, you not only need to keep an eye on your credit score and report, but you also need to be looking out for any errors that you see. Fortunately, it is pretty simple to dispute these errors with the credit bureau.
3. Make Sure You Pay Your Bills On Time
Whether you are able to pay your bills on time makes up over a third of your credit score. This means that the best way to fix credit score is to make sure that you are consistently making all of your monthly payments on time so that you don’t get late fees.
This might feel like an overwhelming challenge but setting up an automatic payment system for your bills is the best way to help you get on the right track. Some bills, such as medical bills, will not have an autopayment option. In these cases, you should pay the bills as soon as you get them.
4. Pay Your Debts Off
Paying your debts off is an incredibly important part of being able to fix credit score. There are two primary ways that you can do this. You can either use the debt avalanche method or the snowball method. The debt avalanche method says that you should pay off your highest debt first and then work your way down to the smaller debts until none are left.
The snowball method suggests the opposite. This is the idea that you should start by clearing away smaller debts first and working up to the bigger debts. You should carefully consider both options to find out which one is right for you. You might see a temporary drop in your credit score while you are doing this, but this will improve your credit rating in the long run.
5. Keep Your Old Credit Cards Open
If you have finally managed to pay your old credit cards off, you might be tempted to close those cards. However, this is not a good idea. If you keep these cards open, you can establish a long credit history. This is 15 percent of your credit score.
On the other hand, the bank that issued your credit card might automatically shut the card down if you go a long time without using it. Additionally, it might be worth shutting the card down if the company charges an annual fee for a card that you are no longer using.
6. Avoid Opening New Credit Cards
You also want to avoid opening up any new credit cards to fix credit score. Every time you apply for a new credit card, your creditor does a hard check on your credit report, which lowers your score. Additionally, if you are approved, it will lower the average age of your credit accounts.
The average age of your credit accounts makes up a significant portion of your credit score, so if it is low, it will cause your credit score to drop significantly. This is why you should avoid applying for any new credit cards unless you actually need to and you’ve paid off your old accounts.
7. Get Help With A Registration Loan
It will take time to fix credit score. In the meantime, you need to have a backup plan in place for what you will do if you encounter a short-term emergency expense. One option that you can consider is coming to Fast Auto Loans, Inc. for a registration loan. The only things that you need to bring with you in order to get started at the nearest Arizona registration loan location are the following:
- Your driver’s license or a state-issued photo ID.
- Your Arizona vehicle registration in your name.
- Your valid social security number.
- An active checking account in your name.
Fix Your Credit Now With These Tips
It is extremely important that you learn how to fix credit score if you do not have good credit. The good thing is, as these tips clearly show, it doesn’t have to be difficult to start working on your credit. And if you need help with an emergency expense while you are fixing your credit, get a registration loan. Fill out our online form on our website to get started on the process.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.