When you find that you have bad credit, it is important that you try to fix it as soon as possible. Having bad credit can keep you from a variety of financial opportunities and you want to take the time that you need to fix your credit quickly and as effectively as possible. Whether you have had problems getting your bills paid or you have defaulted on a loan, you should understand that you are not alone.
There are millions of people in the United States that have bad credit and the frustration that you feel when dealing with a bad credit score is normal. While you are looking to obtain a loan or even get a credit card, you may find that your bad credit severely inhibits your ability to do so.
Find Out Where You Stand
The first step in improving your credit score is figuring out where you stand. You should know your exact credit score. If you find that your credit score is below a 760, there is room for improvement. Making strides with your credit score will ensure that you are able to obtain loans in the future, get good rates on credit card interest rates and be eligible for financial opportunities in the future.
Repair Credit With a More Credit?
After you know what your credit score is, get a credit card. This may seem counter intuitive, but when used wisely your credit card can be a great tool to help you rebuild your credit. Start by taking the time to find a credit card that you will be able to be approved for. Once you have found this card, use it but make sure that you are using it wisely.
You should never put anything on your credit card that you are not going to be able to pay for when your statement comes. As you rebuild your credit, simply use your credit card rather than your debit card. Spending within the range of money that you are making is a great way to ensure that you are able to build your credit.
Try to keep your spending within 30% of the limit of the credit card. That way, you can be sure that the use of the credit card is beneficial for your credit score. When you are able to control your spending and keep your balances down on the credit card you will find that your credit card spending can be extremely beneficial.
Pay Down Existing Balances
If you already have credit cards and you have an outstanding balance on those credit cards, start to pay down those balances. When you pay down those balances, you can be sure that you are able to portray that you are responsible with your credit card. Paying down that balance can be a great way to help you increase your credit score.
Loans Can Help Build Credit
When you are in the position to take out an installment loan, you may find that this can help you credit score. Taking out a personal loan, a school loan, an auto loan or even a mortgage can be a great way to show that you are responsible with money. When you take out your loan, you should be sure that you are always making your payments on time. As you make your payments on time you may see an increase in your credit score.
As you look through your credit history you may find a late payment that you have made. If you have been a quality customer of your credit card’s institution, you may want to ask for some goodwill. There are many institutions that will simply erase a late payment to help you with your credit score. Contact your lending institution when you recognize that there is something on your credit score that could possibly be taken off by them.
Getting your credit score back to a healthy score can be a long process. Don’t be afraid to be patient with the work that you are doing. Although it can be frustrating, you should understand how you are going to slowly but surely work back to a strong credit score. Take your time paying attention to your finances and make sure that you are not afraid to talk with a professional should you have any questions. Getting your credit score back to a quality score may be time consuming, but it will be well worth the effort. You will find that the financial opportunities that are opened with a strong credit score can help you in a variety of ways throughout the rest of your life.