You’ve got bad credit. Therefore, you’ve got a bad credit score that you need to fix. How do you do that? That’s what this blog is for.
Recovering your credit score is not an easy task, but it is an imperative one in order to keep your finances in a good place and maintain or re-enter a place of good financial standing.
Read on to see our three top tips for how to fix a bad credit score.
1. Pay Your Bills on Time
Paying your bills on time is a great way to recover your poor credit score because of the simple reality that payment history impacts your credit score immensely. If you haven’t been doing this, you will notice that your credit score has been dropping because you are considered to be unreliable with respect to paying off your bills in a timely manner. Beginning to do this, even if you haven’t always done so, is a good way to start rebuilding a bod score because, inversely, it begins to display to your creditors that you can be relied on to pay off your bills when necessary, re-establishing trust that is necessary when you eventually look to take out a loan or use a creditor for other immediate financial assistance.
2. Reduce Credit Card Limit
"If your low credit score is due to having maxed out credit cards or high balances on your revolving debts (e.g. line of credit or credit cards), this can be fixed as quickly as you can bring your balances owing, down to below 75% of your credit limits (below 50% is even better and under 30% is best)”. This will also help you reduce your spending over time and make it easier to pay off your credit cards in a timely manner, another strategy that is useful and effective when you are trying to rebound your low or bad credit score to a respectable level.
3. Check Credit/Request “Hard” Inquiries Less Often
There are two types of credit inquiries. A soft inquiry and a hard inquiry. A soft inquiry, where you check your own credit or give permission for an employer to do so, does not affect your credit score. Conversely, however, a hard inquiry can damage your credit score significantly. Now, let us be clear. A single hard inquiry, when you apply for new credit, is only likely to hurt your score temporarily. A consistent amount of hard inquiries, especially over a short timeframe, though can do some serious damage that is hard to recover from. Therefore, we recommend limiting these types of inquiries to help recover your credit score.
Okay, so now you’ve read this blog and now your child is sitting next to you and you’re wondering… how am I going to prepare them for this reality in the future? How am I going to get them ready to understand how credit works and how not to make mistakes with their credit that is going to make them need to read a blog like this to fix their issues?
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