Bad credit makes many things complicated, difficult, impossible, and even more expensive.
But when you realize that you have a bad credit score, you might be thinking of fixing it as soon as possible. However, you do not have a budget to hire a credit specialist or credit repair company to help you repair your credit score rating.
The good news is, you can actually repair your own credit score without taking out your hard-earned money from your pocket to pay a credit fixing agency. There are many ways or guidelines on how to completely repair your credit on your own.
Why go after credit repair?
Aiming high credit score is vital. A good credit score opens you to many opportunities. For getting easy approval for any loans when you need them, such as home loan, student loan, car loan, or even getting a job and promotions with your current employer. You will also have the lowest and affordable interest rates.
You have to know first what you need to repair before you can fix it. Your credit report contains all the missteps you have made that have prompted bad credit. To improve your credit score, you must follow these simple do-it-yourself guidelines.
1 Get a free credit report
By law, you are entitled to get a free credit report from each of the three major credit bureaus.
2 Review credit report thoroughly
When you get a copy of your credit report, check if they have any errors. Look for inaccurate personal information such as name, address, Social Security number, your credit accounts which includes payment history, credit limit, and account balance. Public records and inquiries in your credit as well.
3 Dispute inaccurate item
It is your responsibility and your right as well to dispute the negative items in your credit and have them removed. Successfully removing negative items in your credit account will help your credit ratings improve.
Write a dispute letter to the credit bureau. It is recommended to send the dispute letter via regular mail to ensure that you have proof of the date when you sent it. Credit reporting agencies are required by law to remove any information that cannot be verified within 30 days.
4 Pay bills on time
Being able to pay your bills on time going forward helps you to fix your credit problems. Payment history has the biggest factor in your credit rating so it will be a huge impact on your credit score rating. The effect of a late payment will give a negative impact on your credit history
5 Keep balances low
You will help yourself repair your credit if you keep your balances low. Make room to budget your monthly bills, and if you have spare or money left after paying other bills, pay your balances as much as you can.
The credit utilization ratio is the amount of money that you are currently using divided by the amount in your credit limit. Which credit experts say that you should only use at least 30 percent of your credit limit to maintain a good credit score.
6 Open secured credit card
You may consider getting a new line of credit to help you repair your credit score. But be responsible for using it. Remember that you are acquiring to repair your credit and not to acquire more debt.
Life today is not that easy. Before you get what you want, you must really work hard for it. Therefore, we should be really careful about what we spend our hard-earned money on. How we spend it, and how much we spend. Life is about experiences. We make mistakes and learn from them. If we once failed on our credit score, we should get up and fix it. Do make the same mistakes.
The overall goal is to have an excellent credit score to get an affordable interest rate and be able to apply for any type of loan such as a home loan, an auto loan, etc.