Is your low credit score dragging you down? Living with bad credit is tough. More people today are living in debt than ever before. Sometimes it’s no fault of their own or the result of medical bills, and sometimes it’s the result of a lack of discipline. Whatever reason brought your score down, you can fix it and get your score up. Don’t know where to start? You’ve come to the right place.
Get your up to date credit reports
Before you can begin your path to credit restoration, you have to know what it is. Under current law, you can receive a free credit report from each of the three credit bureaus every single year. Get it! Not only will you see your score and how it breaks down, but you might also catch some discrepancies that you can address and have fixed which puts you on the right path to your credit clean up.
Dispute and tackle
Once you’ve reviewed your credit reports, you need to dispute those discrepancies and tackle the overdue accounts. Discrepancies, while time-consuming to rectify, don’t take life-altering plans to fix. Getting current on your payments, however, that’s a different story. You might even want to consider utilizing a credit repair service.
Did you know your payment history accounts for 35% of your credit score? That’s more than any other factor used to determine your credit score. If you’re delinquent on several accounts, that’s going to drag your score down and fast. Get all of your accounts current before you attempt to pay anything off. That’s the language you want to see when you’re doing a credit clean up: current. When all of your accounts say “current,” your credit clean-up process will be well on the way to raising your credit score.
Additionally, hiring a credit repair company to take care of your dispute letters for you can save you a lot of time and frustration. Your Personal Finance Tips has top reviews on companies in the field to help you evaluate which one might be right for you.
Now that all of your accounts have the word current next to them, it’s time to start reducing your credit balances. Your debt to credit ratio accounts for 30% of your credit score. If all of your credit cards are maxed out or very near the limit, your credit score will fall. When you start paying down the balances, do not use the cards and charge the balances back up. Read that sentence again. That will just put you in a vicious cycle, and your credit restoration efforts will be for naught. For further analysis, check out this article on repairing, rebuilding, and protecting your credit.
To sum up: get your data; dispute, and tackle; pay off.
You don’t know how much you have to pay off or what to dispute and tackle until you have your accurate credit reports, a process that a credit repair service can help you navigate. It all starts with that first step.
And that’s it. Simple, right? No, it’s not. Credit management takes effort and time, but the eventual payoff (pun intended) is worth it. No longer will you feel constrained by an inability to save money or obtain credit but you’ll be free from the burden of continually owing someone else money.