How To Fix Your Credit Score With These simple Steps

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If you have a lower credit score it can hold you back from achieving your goal. Whether that’s getting a new car, buying a house or getting access to an emergency loan. It can also mean you get charged higher interest rates on loans.

However, keep in mind improving your credit score takes time and consistent effort. Here are some steps you can take to work towards improving your credit score:

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1. Check Your Credit Report

Obtain a copy of your credit report from each of the major credit bureaus (Equifax, Experian, and TransUnion). Indeed, the report will highlight all of the accounts in your name, your credit history and your oldest line of credit. In addition, a free report is available at minimum once every 12 months at AnnualCreditReport.com. Review the reports for errors, inaccuracies, or fraudulent activity. Dispute any discrepancies you find. Finally, it is good practice to check your credit score once per month.

How to Fix your credit score

2. Pay Your Bills on Time

Typically, your payment history makes up 35% of your credit score. It is the largest scoring factor in both FICO and VantageScore credit scoring systems. A late or “delinquent” payment stays on your credit report for 7 seven years.

That is why a timely payment of bills, including credit cards, loans, and utility bills, is crucial for a positive credit history. Set up reminders or automatic payments to ensure you never miss a due date. An account marked as delinquent will hurt your credit score. Autopay and account reminders can help you pay your bills on time and some creditors even offer discounts when you set an autopay.

3. Reduce Credit Card Balances

Aim to reduce credit card balances, especially if you are using a significant portion of your available credit. High credit utilization can negatively impact your credit score. Strive to keep your credit card balances below 30% of your credit limit. The highest scorers tend to have credit utilization below 10%.

You can control your credit utilization by:

  • Paying down revolving credit debt, focusing first on cards or lines that are close to their limit
  • Requesting an increase in your credit line if you are a good customer with a solid payment history
  • Paying more than once in a billing cycle; adding in a payment mid-month may lower the balance that is reported to the agencies
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4. Avoid Opening Too Many New Accounts

Opening multiple new credit accounts within a short period can be perceived as risky behavior. Each new application can result in a hard inquiry on your credit report, which may slightly impact your score typically by up to five points. In addition, this also lowers your average account age, which also decrease your credit score.

5. Diversify Your Credit Mix

Having a mix of different types of credit (credit cards, installment loans, etc.) can be beneficial for your credit score. However, only open new credit accounts when necessary and ensure you can manage them responsibly.

6. Negotiate with Creditors

If you’re struggling to make payments, consider reaching out to your creditors to discuss your situation. They may be willing to work with you on a modified payment plan or offer other solutions to help you meet your financial obligations.

7. Become an Authorized User

If you have a family member or friend with a good credit history, ask if you can be added as an authorized user on one of their credit accounts. This can potentially help improve your credit score by including positive account information on your credit report. Just make sure the account reports to all three major credit bureaus (Equifax, Experian and TransUnion).

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8. Build a Positive Credit History

Building a positive credit history over time is essential. Make small, manageable purchases on credit and pay them off in full each month. This demonstrates responsible credit management.

9. Seek Professional Advice

Consider seeking advice from credit counseling agencies. They can provide guidance on managing debt, budgeting, and improving your credit score. Be cautious and choose reputable organizations.

10. Deal with collections accounts

Paying off a collections account removes the threat that you will be sued over the debt, and you may be able to persuade the collection agency to stop reporting the debt once you pay it. In some instances, paying off a collection account can improve your credit score and possibly makes you look good Infront of a lender.

10. Be Patient

Improving your credit score is a gradual process. It’s important to be patient and persistent in your efforts. Positive financial habits over time will contribute to a healthier credit profile.

Remember, there is no quick fix for improving credit scores, and any legitimate improvement will take time. Be wary of companies that claim to magically repair your credit overnight, as they may engage in fraudulent practices. Focus on responsible financial habits and monitor your progress regularly.

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