Credit Repair: Believe It Or Not It’s Possible

Friday, April 14, 2017, AM | Leave Comment

Rebuilding your credit can seem difficult at first, but it doesn’t have to be. A credit score can range from 300 to 850, with lower numbers representing a heavier risk.

If your credit score has fallen below 600, you may have a hard time finding lenders and credit products that you can qualify for.

Credit scores of 720 or above will generally receive the best interest rates on loans and credit cards.

To help you along your credit-building journey, here are 6 tips for improving your credit score:

Credit Repair

  1. Learn How Credit Scoring Works

    Before you can begin improving your credit score, you will need to understand basic factors that influence it.

    Your credit score is based on five key factors:

    • Payment History

    • Credit utilization (amount of credit you have used)

    • Age of accounts

    • Amount of new credit you have

    • Mix of credit

  2. Take a Look at Your Credit Report

    Now that you know that your credit score is based on information obtained in your credit reports, the next step is to pull your reports and see what is on them.

    You are entitled to one free credit score from each of the 3 major credit bureaus each year. Taking a look at your credit report will give you some insight into what is keeping your score down.

  3. Always Pay Your Bills on Time

    Late payments can damage your credit score so it is very important to pay your bills as scheduled. With that said, do not beat yourself up if you miss the occasional payment. While this will negatively impact your credit score, the impact of a single late payment will diminish over time as long as you continue to pay your bills on time.

    Having good credit history can help minimize the effects of late payments you may have made in the past. With your payment history accounting for 35% of your credit score, on-time payments can have a huge impact on your score.

  4. Reduce Your Credit Card Balances

    Your credit card balances make up 30% of your credit score. If you are maxed out on one or all of your cards, you will likely see a huge decrease in your score.

    As a general rule, always try to keep your balances under 30% of your credit limit. Rather than maxing out your card and paying it off at the end of the month, try to keep your balances under 30% utilization at all times.

  5. Have a Variety of Credit Types

    Having a good mix of credit types makes up 10% of your score. Most credit-scoring models favor people who have both installment credit (i.e. mortgages or auto loans) as well as revolving lines of credit.

    If you only have one type of credit listed on your report, it could be damaging your score.

    It may be beneficial to consider applying for a secured credit card or loan. Take some time to shop around and find a lender that will report the account to all three of the major credit bureaus.

  6. Protect Your Identity

    If you are not careful with your personal information, you can easily become a victim of identity theft. Thieves can use your address and social security number to open loans or credit cards in your name. When they do not repay the money that they borrowed, your credit score will suffer.

    Depending on the extent of the damage, it can take months or even years to repair the damage. Protecting your personal information and monitoring your credit reports regularly can help you avoid this situation.

Credit repair may seem intimidating at first, but it can be easier than you think. If you have difficulty following any of these tips, you may want to enlist the help of a credit repair company.

Seeking professional help is always a good idea. You may even want to use credit repair company reviews to help you identify one that will deliver the results you desire. That way you can make sure that you can get your credit back on track with the best possible help. Just be sure to take the time to do your research and find the best solution for you.

Author BIO

Kara Masterson is a freelance writer from West Jordan, Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max.

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