Credit scores are something that many people take for granted. If you have a high score, you can get approved for loans at lower rates and access better credit cards. But if your credit score is low? You’ll have to pay much more money in interest on any loan or card that you want. It’s essential to keep track of your credit score so that it stays up-to-date, but what should you do if it isn’t where it needs to be? Here are the steps that will help you fix bad credit score!
Check Your Credit Report
One of the first steps to fix your credit score is checking it. You can go on annualcreditreport.com to get an updated version of your report for free every year from each reporting agency (Equifax, Experian, and TransUnion). You must check all three because they might not always have the same information. If you find any inaccuracies on your credit report, dispute them immediately with the bureau reporting it. This could take some time to get fixed, but it’s worth it to raise your credit score.
Pay Balances on Time
Paying your balances on time is the number one way to keep your credit score high. Late payments can damage your credit score significantly, so make sure you consistently pay your bills on time. If you have trouble remembering to pay your bills on time, set up automatic payments or use a calendar reminder to help you stay on track. In addition to paying your balances on time, you should also minimize using your credit. Utilization of credit is the portion of your total credit limit that you are using at any given time. You can calculate it by dividing your current balance by your credit limit.
Increase Your Credit Limits
If you have a good credit score, one way to improve it is by increasing your credit limits. This will show lenders that you can handle more debt and are low-risk borrowers. Just be sure to keep your spending in check, so you don’t end up with a higher balance and decreased credit score. Call or chat with your current credit card company to increase your credit limits. Some companies will allow you to request a specific limit increase, while others have pre-set tiers based on how frequently you use the card and your payment history.
Fixing your credit score may be easier than you think. The following three steps will get you started on the right track to building a healthy credit profile while also helping improve your financial situation overall. It’s never too late to start taking steps to fix your credit score.