Monday, May 9, 2016, AM | Leave Comment
If you have bad credit, it may be harder to get a loan, find an apartment or get good rates on car insurance. The good news is that you can improve your score in a few easy steps.
Within months, you may be able to add dozens if not hundreds of points to your score, which will make lenders and others feel better about working with you.
The Importance of Good Credit
Why is having good credit so important? It is because your credit score is often seen as an indication of how responsible you are with your money.
Generally, those who are responsible with their money tend to be responsible in other aspects of their life. This is why landlords want to rent to people with good credit and why lenders will give you lower interest rates on unsecured loans.
Improve Your Credit Score By Increasing Your Available Credit
The more credit you have, the better you look to lenders and other creditors. This is because you have shown that you can handle large sums of money without going insolvent.
Obtaining additional credit means that you are using a lower percentage of your available credit balances. To increase your amount of available credit, you can either apply for a new credit card or ask for a increase to a current line.
An increase to a current line may be preferable as inquiries made on your credit report prior to opening a new account could temporarily decrease your score.
Improve Your Credit By Resolving Past Due Debts
If you have any past due or unpaid bills, you should resolve those with your creditors as soon as possible.
In the event that you can’t pay the entire past due balance, ask about a payment plan that allows you to make up those payments over time.
You may also want to ask about rolling past payments into your current balance or having them forgiven altogether.
However, any forgiven balances will be treated as taxable income, so be ready to pay the IRS if you do have any portion of a debt balance forgiven.
Improve Your Credit By Cancelling Your Newest Credit Accounts
Your credit age plays a role in calculating your credit score. Generally, the older your credit age, the better off you are in a variety of ways.
First, anyone looking at your credit report likes to see that you have many years’ experience with credit as opposed to just several weeks or months.
Second, you may be able to get away with a higher credit utilization rate if you have a longer credit age as you will get the benefit of the doubt because of your experience.
Lastly, getting rid of a new account may stop you from racking up new debt that you don’t know how to pay off.
Improve Your Credit By Consulting the Pros
One of the best and fastest ways to bring your score up is to consult the professionals. While you should take some steps on your own to improve your credit, a credit repair company can offer valuable help and advice along the way.
Do credit repair companies work? Absolutely, especially for those who prefer some professional assistance on their way to financial freedom.
Just because your credit is bad today doesn’t mean that it can’t get better. Focusing on paying your bills on time, reducing credit balances and waiting for previous mistakes to disappear will improve your image and make it easier to get the credit you want or need.
As good financial habits begin to take hold, you may notice that it is only a matter of months before your credit score and history are sufficiently rehabilitated.Facebook.com/doable.finance