Are you having trouble maintaining your credit score? Are you unable to get loans and other financial assistance because of your poor credit score? If you’re experiencing these problems, then you’re not alone. Many Americans struggle with their financial lives, especially regarding their credit score.
Your credit score allows you to make many financial decisions, like taking out a loan, getting a mortgage, etc. If your credit score is poor, your financial life will be very challenging. If you’re looking to fix your credit score ASAP, here are some things you can do.
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Check Your Credit Report
Before you follow these tips to improve your credit score, one thing that you should do is check your credit report. Your credit report contains most of your credit history, which includes your past loans, current bank and loan accounts, credit card accounts, basic information, etc.
If you think your personal information has been used in fraudulent activities and your credit score is suffering, you can dispute it in your credit report.
Don’t Miss Your Payments
You have a great opportunity to fix your credit score if you’re repaying a loan and trying to keep up with the monthly payments.
Missing out on payments is one of the greatest sins regarding your credit score. It shaves off many points, even if you miss a single payment. However, when you have a bad credit score already, one quick way to gain more points to your credit score is by simply keeping up with your payments.
You need to ensure you don’t miss out on any payments. Any overdue missed payment will automatically get reported to the credit bureau. If you’re constantly missing out on monthly payments, one way to make your life easier is to set up automatic payments from your bank account. This way, you won’t have to worry about missing monthly payments, which boosts your credit score significantly.
So, whether you have personal loans Florida or installment loans in Brooklyn, these tips should help you stay on track.
Aim for Less Than 30% Credit Utilization
Credit utilization is the amount of credit you use from your credit limit. For example, if you have a $12,000 credit limit on your credit card and use $6000, your credit utilization is 50%, which is not good. Luckily, bringing down your credit utilization below 30% is fairly easy. The simplest way to do it is to limit your credit utilization.
You can do this by using cash more often, avoiding using your credit cards in all your transactions, and paying off your balances more often. Regarding balances, most credit card companies usually report them before the month ends in your billing cycle.
If you can’t limit your credit utilization, you can bring it down significantly by paying it off twice a month before the month ends and paying as much as you can every time.
Limit Your Credit Request
There are two types of inquiries in your credit score, which are soft and hard. A soft inquiry is usually created when you check your credit and let an employer check your credit, checks performed by financial institutions, etc. Most of the time, they don’t affect your credit score too much, so it’s okay to get them occasionally.
On the other hand, hard inquiries are created when you get another loan, open a new credit card account, etc., or in other words, significant financial decisions. For every hard inquiry you have, your credit score gets reduced significantly, so if you’re trying to fix your credit score, try to limit your hard inquiries.
Keep Your Old Accounts Open
It’s tempting to close your old accounts once you’ve done paying for them. It gives a sense of accomplishment, but did you know that closing them down can hurt your credit score? If you have old accounts that you’re not using anymore, don’t close them. A portion of your credit score comprises the age of your credit accounts.
It’s a pretty essential factor when credit bureaus compute your credit score. The longer you have an account on you, the more points you’ll have, not to mention that even if it’s old, it still contributes to your credit utilization.
Final Words
Maintaining a good credit score is hard. You can’t get loans easily, opening a credit card account is challenging, etc. However, it doesn’t always have to be this way. You can take steps to improve your credit score.
It’s going to be hard, yes, but it’s all worth it in the end. Remember, the better your credit score is, the easier it will be for you to make financial decisions.
