Trying to get by these days without a decent credit score is not exactly easy. Horrible terms and rates are only two of the penalties for bad credit and sometimes you can’t find credit at all. Just a few little mistakes or bad financial decisions can start you down the road towards bad credit and fixing it is imperative. But how do you go about it? Exactly how do you fix bad credit once it is in motion?
How to Fix Your Credit Score
Here are several things to consider:
Get Smart about Your Problem
It is virtually impossible to fix any problem unless you are aware of exactly what the problem is. With credit, you have to thoroughly look through all three credit reports and compare them to one another. Figure out if your problem is debt to credit ratio or if you are constantly late on payments. Narrowing down your problem with bad credit is a big part of the process. Very few people are fully aware of why their credit is bad in the first place. Get smart about your credit and you are ahead of the game.
Compare the Credit Reports Closely
If you see the same problems and reports across all of them, you can be fairly sure that they are accurate. Still, you should take the time to make sure they are accurate. Mistakes happen all the time on credit reports and it will sit there and harm your score needlessly if you do not dispute it. Make absolutely sure that everything on your credit reports accurately reflects your situation. Credit Sesame is one my favorites as it offers free credit monitoring AND $50K identify theft insurance in addition to a free monthly credit score.
Pay What You Can and Make Arrangements for the Rest
This sounds rather straightforward and it is. Why complicate something that is so simple? If you owe someone money, you should pay it or make arrangements to pay it in installments. This is the first step in getting rid of bad credit and it is a lifelong habit that you need to adopt. Otherwise, you will find yourself with bad credit all over again.
Create a Budget and Stick to It
A budget is one of your best friends when you are trying to eliminate bad credit. Part of the process involves fixing bad habits. A budget can prevent you from overspending, being late on payments and other habits that lead to bad credit. By sticking to a budget you will be building habits that will naturally eliminate bad credit in the future.
Set Everything up You Can on Auto Pay
The auto payment feature that banks offer now is a lifesaver for procrastinators and people who have trouble remembering due dates. All you have to do is make the money and put it in the bank. From there, the bank will send out payments to all of your debtors on time and in the right amounts. It is nearly impossible to mess up a payment with this program.
Earn More to Pay down More Debt
When you more than you make, you simply have to earn more. Usually we can fit in a part-time job or at least a work from home opportunity if we try. Look at your situation and try to discover opportunities to earn more money. Paying down your debt is the number one way to eliminate bad credit.
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