Today, now more than ever, it is important to have a good credit score. Bad credit can keep you from having a phone, utilities in your name, getting an apartment and even obtaining insurance. There are easy ways to fix your credit score. This can be done easily and for free in many cases. Poor Credit Loan services are expensive and can be avoided if you take these few steps to fix your low score.
5 Actions That Hurt Your Credit Score
When you open a new account or apply for a loan or credit line it puts an inquiry on your credit. Too many of these can reduce your credit score.
If you send in late payment to your existing lines of credit your credit company can post this on your credit report.
Debit to Income ratio;
If you carry a high amount of debt in loans and credit lines this will bring down your credit score. Be sure to pay down any loans that you have.
If you allow any outstanding bills to go to collections it will negatively affect your score.
Judgements or charge offs;
If you allow a bill to remain unpaid for a long period of time the company may decide to “charge it off” or file court paperwork and get a judgement against you. Once a debt goes this far it can take years to clear it off of your credit report.
Here are 5 steps you ca take to you fix your bad credit score
There are 3 major reporting agencies. Check with each one and look for discrepancies.
Dispute any discrepancies;
If there are discrepancies contact the reporting agency and ask them to correct the problem. Your can do this online or request that the proper form be sent to you.
Close credit accounts that you no longer use;
if you have credit accounts that you no longer use close them. It is important to note that if you have an account that has been open for a long time this can effect your score in a positive way. You may want to consider transferring debt from newer cards to the older one and closing the newest card.
Pay off old bills on your reports;
Once you have verified the accuracy of your credit reports, start paying off the companies that you owe. In some cases you can contact them and negotiate a lower pay off amount. Don’t be afraid to negotiate.
pay your credit payments regularly, on time, and keep the amount you owe at least 50% of your limit. Remember if you inquire about a lower interest rate they can raise the rate and also this puts an inquiry on your report.
Remember that almost any action on your credit report can bring your score down. So be aware when applying for new credit and asking for adjustments on your current interest rates. As you do these simple fixes on your credit report you may see a dip in your score, but it will soon come back up as your score is updated. Generally this can take up to 60 days.