When you have bad credit, it will be challenging for you to apply for a loan. Lenders usually base your credit score to determine your creditworthiness. Your application might get denied when you have bad credit. Or lenders will charge you a much higher interest rate. There are ways to fix bad credit; you can improve it on your own if you have much time or consult a credit rebuilding service.
How to fix bad credit:
1. Check your credit report once every six months.
– this is to rectify any errors on your credit report. Even a minor error on your credit report can cause damage to your credit if not taken care of.
2. Repair your credit report in case of errors.
– as I’ve said, either minor or significant errors on a report can cause damage and may decrease your credit score.
3. Look for identity theft.
– nowadays, identity theft is around the corner. That is why checking your credit report is essential. Someone might be using your name and damaging your credit report.
4. Do not open unnecessary accounts.
– open accounts that you need. Because opening an account also decreases your credit score.
5. Do not open multiple accounts.
– zero balance is also taken into consideration. Close accounts that are not in use to maintain your credit report easier.
Bad credit is not the end of the tunnel. You always have the choice to leave it like that or fix it. Fixing bad credit is a process that takes time. It will take a lot of your time and reach your limit of patience. Your credit report may have several errors in it. That can be one cause of why your credit report went terribly.
Credit repair is raising your credit score from its current position to a higher one. Many credit restoration companies might help you with credit repair. There are ways to revamp your credit.
1. Pay minimum balances before the due date.
– if you can’t afford to pay your whole balance when it’s time for repayments, make sure to pay the minimum payments for each account. That way, it won’t cause any damage to your credit score.
2. Pay bills on time.
– this has the most significant factor that affects your credit score. It breaks or makes your whole credit report. Make sure to pay before the due dates. This will be the biggest help to fix bad credit.
3. Become an authorized user.
– ask for a family member or friend with good credit to make you their authorized user. Their responsible payment habit can boost your credit score.
4. Consider a secured credit card.
– a secured credit card is like your traditional credit card, but you must deposit upon opening an account. This helps you boost your credit score because you have no debt to pay. What you deposit will be your credit limit.
5. Catch up on an over-due date.
– You should prioritize your debts that are already due dates. Fixing it first will help you maintain your credit in the future.
Our goal here is to get you out of bad credit. But how fast can you do that? Can your credit score increase a hundred in 30 days? There is no shortcut to repairing credit. However, there are ways that you can use to fasten the results on your credit score.
Credit cards are one of the most commonly used accounts in credit. It would help if you started utilizing your credit. You should use only 30% of your credit limit. Utilizing your credit can boost your credit score.
What should you do if your lender reject your application?
If you get rejected by your lender. Ask why. Although it can be because of your credit report, it can also be because you failed to meet the lender’s standards. It can be because they require a higher credit score or higher requirements of income.
If you need to dispute any errors on your credit report. Here’s how you do it. Mail a written report on credit bureaus. Ensure that the letter contains your contact information, including your name, current address, and telephone number.
Clearly identify the error you want to dispute, like stating the account number in which account that has a mistake. Please explain why you want to deny this information and request it to be removed. Disputing an error can also help boost your credit score. So make sure to check your credit report once every 6 months.
Having bad credit is pretty hard. You can’t guarantee a considerable loan, or you might get charged a higher interest rate. That is why maintaining healthy credit is essential. Healthy credit is beneficial for you. And has a lot of help concerning your finances. Fix bad credit as early as now.
If you feel like you cannot do your credit repair alone, there is nothing to worry about; there’s the best credit rebuilding company. You need to have a good eye and choose someone trustworthy. Someone who will actually help and not worsen your situation.