How to Fix Your Credit Score

Having a good credit score is crucial when it comes to applying for credit in any form. Whether you’re applying for a mortgage to buy a house or a small loan to buy a car, your credit score is one of the top factors taken into consideration as to whether you’ll get the money or not. Bad credit has been a growing problem for years, and has gotten especially bad in the last decade, so many people are looking for ways to fix up their credit. If you’ve made some mistakes in the past with your credit, follow the steps below to help fix your credit score and get back on the right track to good credit:

Look Up and Keep Track of Your Credit Score

First things first – you need to know what exactly your credit score is and you need to keep track of it. If you don’t have regular access to your credit score, you won’t be able to track the changes to it and be able to determine what’s working to fix it. By law, you’re allowed one free credit score analysis per year; anymore than that, and you’ll have to sign up for a service that will charge you around $10-$15 per month for unlimited score look ups.

Set Up Automatic Payments

Even if it is just for the bare minimum setting up automatic payments will show effort and keep you from missing payments and putting anymore dings in your score. You can always set it up for the minimum (at least) and then pay additional on top of that each month if you have it.

Track It

Sometimes mistakes happen and that holds true to your credit. You need to track your credit report and keep your eyes on it. Sometimes something might get reported late when it isn’t, or you may have forgotten about an old card that is still open but sitting with no activity. These slight reflections and many more can often be fixed if caught early. Close your old accounts. If you have only one late payment CALL and ask that they grant you a courtesy extension. Negative things are supposed to vanish from your credit report after 7 years or 10 years for bankruptcy. Check and make sure they did in fact vanish. You can never go wrong by paying attention and tracking your credit report.

Don’t Apply for New Credit

Credit scores not only reflect credit cards and loans that you do have they also reflect what you have been trying to get. If you get panicky and apply for 10 different credit cards each one of these applications take a notch out of your credit score. Sometimes you might even get a decline reason due to “Too many inquiries.”

Keep your Balances Down

Using credit cards is not a bad thing. It is one of the best ways to build and improve credit, but you have to use it properly. Make sure you are not maxing your cards out monthly. Even if you pay them off monthly, don’t max them out. The best rule of thumb is to always always keep 30% of your available credit available. This reflects that your not using all you have and that your credit is good enough to stay away from the limit.

Credit is tricky and it can’t be changed overnight. You have to work and work at it to achieve a higher credit score, but in time your work will pay off. Your credit may be injured or broken, but it is almost never damaged beyond repair.