7 Ways To Fix Your Credit And Prevent Mistakes

June 9, 2022 | June Mckaig

fix your credit 

Living with a bad credit score is stressful and can have a negative impact on your finances. It may seem daunting or even hopeless at times, but there is good news; you can improve your credit. We have formulated a list of ways you can begin working on fixing your credit. It will take time and discipline, but these strategies can help you repair your credit score.

How To Improve Your Credit

Keep An Eye On Your Credit Score

You need to keep an eye on your credit score if you want to fix your credit. Your credit score is part of your credit report, which is a detailed record of how you have used your credit over the last decade. You have a credit report with each of the three major credit reporting bureaus, Experian, Equifax, and TransUnion. Usually, creditors will report to all three agencies, but this is not always the case. This is why it is a good idea to check your report with each bureau.

Dispute Any Errors

One of the reasons why it is important to regularly check your credit score is because sometimes credit bureaus make errors on your credit report. The Federal Trade Commission conducted a study that found that a quarter of Americans had an error on their credit report, and many of these people had errors that significantly hurt their credit score.

If you do happen to see any errors on your credit report, you will want to dispute them with your credit bureau, which should be a simple process.

Pay Your Bills On Time Every Time

If you are looking for ways to fix your credit, the single most important thing that you can do is pay all of your bills on time, every single time. Your payment history makes up more than a third of your credit score, so you should be focused on this.

It might feel like a challenge to keep up with all of these bills and pay them on time every month. The solution to this is to set up an autopay system so that the bills are automatically paid off.

If you have irregular bills that you cannot set up automatic payments for, such as medical bills or auto repair bills, you should make sure that you pay these as soon as you possibly can.

Keep Your Credit Utilization Ratio Low

Another way to fix your credit is to keep your credit utilization ratio low. This is the percentage of credit that you have used compared to the amount of credit that you have available.

If you have a credit utilization ratio that is above thirty percent, this will lower your credit score. Having a high credit utilization ratio is seen as a sign that you are not good at managing your credit, and lenders will be less likely to take a chance on you.

Pay Off Your Other Debts

If you have any outstanding debts, you need to pay them off as quickly as you can to reduce your credit utilization ratio and improve your payment history. This is another one of the critical ways to fix your credit.

If you have a lot of outstanding debts, one thing that you can do to start repaying them is the snowball method. This is when you start by paying off your lowest debt and gradually working up towards the higher ones.

Keep Your Old Credit Cards Open

The length of your credit history is another factor in determining your credit score. This means that one of the ways to fix your credit is to keep your old credit cards open, even if you do not frequently use them.

However, if your issuer charges an annual fee or if they shut your card down due to inactivity, this can be a situation where it is best to close the card.

credit cards

Avoid Taking Out Unnecessary Credit

Every time you apply for a line of credit, your creditor does a hard check on your credit report. This lowers your credit score. Additionally, opening new credit cards will also lower the average age of your credit accounts, which will hurt your credit score.

Getting Help with A Bad Credit Loan

If you need fast cash to cover an emergency expense while you are rebuilding your credit score, it can be hard to find a loan. You do have options that you can consider though. One of those options is to apply for help from New Mexico Title Loans, Inc. in the form of a bad credit loan.

These title loans are a way that you can get the fast cash you need, based on the value of your vehicle’s title. Because the vehicle title is your collateral, you do not need to worry about your credit score. New Mexico Title Loans, Inc. is happy to accept good, bad, and nonexistent credit.

Final Thoughts

There are several ways that you can fix your credit score, but you will have to devote time and discipline to doing so.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

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