This contributed post is for informational purposes only. Please consult a business, financial and legal professional before making any decisions. We may earn money or products from the affiliate links in this post.
Bad credit can do more harm to you than just preventing you from getting a loan or good interest rate. It can also make it more difficult for you to buy insurance, apply for a new credit card, rent an apartment, or even secure a job. With a poor credit score, you will have limited choices, and you can expect to face extra obstacles in many areas of your life. However, there are a number of things that you can do to improve your credit score.
Check Your Credit Reports
According to a Federal Trade Commission study, one out of four credit reports contains an error that can have an impact on credit scores. Such an error can come in the form of incorrect personal information, outdated information, or a duplicate. For instance, your account may have been mixed up with someone else’s, negative information may have stayed on your report longer than it should, or the same debt may appear more than once on the same report.
The three main credit bureaus allow you to get a free credit report from them once a year, so you should take advantage of this service to check the accuracy of your reports. Monitor your credit score closely and report any mistake you find.
Use Less Credit
If you divide your total credit balance by your total credit limit, you will get your credit utilization ratio. Usually, the more credit you use every month, the lower your score will be, according to Sky Blue Credit Repair (https://
Be Careful about Credit Applications
Applying for new credit will start a credit inquiry, which can be bad. However, it can be advantageous to have more credit, especially different types of credit. If you want to repair your credit score, it is important that you do not apply for a new credit card or cancel an old one. Also, if you need to apply for more than one loan, it is recommended that you cluster them together in a short time frame, because the credit bureaus regard tightly-grouped credit inquiries as one.
Fixing bad credit is not an easy task, but you can succeed by following the tips above. You will also have to be disciplined if you want to improve your credit score organically.
Photo: Wikimedia Commons