Looking for a Way to Repair Your Credit Score? Here is Some Advice

Repairing Credit Score

How bad is your credit score? Does it make you want to put a bag over your head every time you enter a bank? A lot of people feel that way, but it doesn’t have to always be like that. Repairing your credit score isn’t impossible, and it doesn’t even take that long either. A poor credit score (below 670 as compared to an average of 710 in the US) can stop you from getting a new car, and having your own dream home. 

In this article, we’ll discuss a few simple steps that you can take to improve your credit score. 

Keep reading to find out. 

1. Keep Reviewing Your Credit Reports

You should receive a free copy of your credit report every year from credit bureaus such as Equifax. But these credit bureaus won’t just hand you your reports on a platter. Although they are legally required to provide their customers with their reports, their customers first need to ask them if they can have a copy of their reports.

Services such as SFGate are another way for you to review your credit report. After signing up for SFGate, you will be able to view all of your credit scores and any associated information. Credit reports rarely end up being identical, so you’ll most likely see different entries on different reports, and the chances of the entries being similar will be minimal.

2. Opt for Credit Repair Agencies

You can fix your credit score by working with credit repair companies.  These companies fix your credit by removing any harmful data that is mentioned in your yearly credit report. These are typically small and common errors that most individuals end up overlooking. Although that’s only a tiny step to repairing your credit score, if you choose a good credit repair agency, they can help guide you to dispute your errors quickly and efficiently, all on your own. With their expertise in fast credit repair strategies, you’ll be well on your way to achieving a healthier credit profile in no time.

3. Pay All Your Bills on Time

The most significant factor that determines your credit score is your history of payments. Any overdue payments for 30 days or more will instantly be reported to the credit bureau. This causes your credit score to drop by a dozen points. Although this might wane over time, it’s essential to have good credit habits, which include promptly paying off your bills to recover and repair your credit score.

4. Pay off All Your Debts

Paying off any outstanding debts that you have will significantly improve your history of payments, as well as lower the credit utilization ratio that you have. It is always recommended to choose either the snowball method or the debt avalanche method when you are considering paying off your credit card debt. 

With the snowball method, you can get rid of smaller balances of outstanding debts and later focus on the larger ones. Whereas with the debt avalanche method, you can repay any high-interest cards that you have first. Paying off your loan debt might result in a small but temporary dip in your credit score. But there’s no need to worry about it, as this will improve your credit score in the long run.

5. Limit Your Credit Utilization

It is always recommended to have a credit utilization ratio of under 30%. This ratio can be measured by comparing your overall credit limit and your card balances. Lenders then use this ratio to assess and determine the way that you manage your finances. A ratio of more than 0% and less than 30% is usually favorable for most individuals seeking a loan.

6. Only Take Out Credit When You Need It

A hard credit check is run by your creditor every single time you apply for more credit. Running this check usually drops your credit score by a minimum of 1 point and a maximum of 5 points. Frequently running hard credit checks also lowers the average account, which further results in a drop in your credit score. So it’s always best to only take out credit when you genuinely need it.

7. Keep Your Old Credit Cards Open

If you keep any old credit cards that you have open, you will be able to establish a long credit history, which will further help boost your credit score by 15%.

Credit Score

By following all of the tips mentioned in this blog, you can help repair your credit score rating in a matter of months, or even less. But it’s essential to be vigilant while following these steps, as it is easy for your score to drop by several points in a matter of minutes.

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The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.