People that have a low credit score will find it challenging to get lenders to agree to let them borrow cash. These people will be needing some credit repair tips and advice. Credit scores that are 720 and above will have access to the best loans and lowest interest rates. If you find yourself in the lower score bracket, you can improve your score by considering some of the tips and advice I am offering here.
Understand Your Score
The first thing you will get as one of the credit repairs tips is improving your credit score. You have to understand what your score means to lenders and how it affects your loan credibility. Keep in mind that the score is evaluated on five factors namely: payment history, amount of credit you have used, the age of your accounts, mix of credit currently and the amount of new credit you have.
Get a Copy of the Credit Report
Since your score is based on given information found on credit reports you have to see what is in them. As a rule, you can get a free copy of your credit report once a year from each of the accredited credit score organizations. By reviewing your credit report you will be able to gain some insight on how you can begin improving the score.
On Time Payment of Bills – One Of The Credit Repair Tips You Have To Do
If you fall into the practice of late payments it can damage your credit score. One of the great credit repair tips is that the bad effect of late payments will diminish with time as long as you begin paying your bills on or before the due date. A recent spate of timed bills payments can easily overcome the effect of late payments you have done in the past. It is important to note that the payment history takes a huge chunk of your credit score, around 35%. Therefore, paying your bills on time as a one of the credit repair tips you have to do has a big role in terms of influencing the number on your report.
Scale Down Credit Card Debts
Credit card debt comprises 30% of your credit score. Maxed out credit cards, even with timely payments will have an adverse effect on your credit rating as Consumer Credit of Minnesota suggests. The credit repair tip is to not allow your credit balance to go more than 30% of your current credit limit. When it comes to computing for your credit score, it is the amount of credit you’ve used at the time of the monthly statement that is given credence and not the amount of payments you have done in a particular month. The best advice is to try and keep your balance low at all times to ensure it will not have an adverse effect on your score.
Pursue A Range of Credit Types
The mix of credit you have comprises 10% of your credit score. When it comes to credit score a revolving line of credit and installment credit is agreeable. Those that only have credit cards listed on their report can potentially hurt their score. Try applying for a vehicle loan or a housing loan and ensure the lender will report the account to the credit organizations.
Guard Against Identity Theft
Identity thieves steal people’s personal information such as social security numbers, addresses etc. so they can hack credit cards or loans in your name. Since the money is stolen you will suffer a credit score downgrade as a result of non-payment of loans you did not know you have. Make it a point to check your credit report and scrutinize the information therein.
Dispute Errors In Your Credit Report As A Con
Credit reports are not always perfect pieces of documentation. There can be errors or mistakes in the entries resulting in a lower credit rating for you. The good news is that you can dispute any errors or omissions in your credit report. The credit organizations are obligated to investigate and correct any errors found in the report at no expense to you.
Live Frugally
The main reason why people get into trouble with debt is they do not respect money. They tend to overspend and live out of budget thinking they can always cover for it in the next payment cycle. However, some other more important things come up that they also have to pay for which results in them not being able to pay the debt. This leads to a vicious cycle of increasing debt and diminishing payments. It always makes good money sense to evaluate one’s own financial situation to ensure that payments to debts and loans are done on time and the amount required. Failure to live within one’s means is a sure fire way to find one’s self in a money pit of a dilemma.