How to Fix Credit Scores
There is no way to quickly fix credit scores since the process takes time to be successful. The best way to fix credit scores is to take care of it in a responsible way steadily over time in order or to repair credit history. Here are some tips for accomplishing that.
Fix Credit Scores: First Steps
• Check a credit report: Free copies can be requested and will provide information used to calculate a credit score. There can be potential errors such as incorrect late payments or amounts owed. Any errors should be disputed and corrected through the credit bureau as well as the reporting agency.
• Setting up payment reminders in order to prevent late payments, which can have a very harmful effect to a credit score. Banks will often provide this service through the online banking sections of their websites. Automatic payments are another possible way to avoid late payments.
• Reduce owed debt by reducing credit card use, and having more effective payment plans.
Fix Credit Scores: Long Term Solutions
• If there are no credit cards associated to an individual, a credit card can help to help show regular payments.
• Showing payments to installment loans such as auto loans, personal loans, mortgages, or student loans can help fix credit scores.
• Paying off credit cards and other revolving credit lines is also an extremely effective way to fix credit scores. It is best to show large gaps credit available and credit used. Typically it is ideal to stay below 30%. Two effective ways of paying off or down credit cards are by either paying the cards with the highest interest rates or those that are closest to their limits.
• Instead of accumulating large balances on credit cards, using less than 30% or especially less than 10%. Balances are reported to credit unions so they should be kept as low as possible.
• Verify limits to be sure the lender is not showing a lower limit. If a lender is doing this, the lender can update this information quickly upon request.
• Keep older cards to maintain an older credit history, but make sure to use them occasionally otherwise the issuer may stop sending updates to credit bureaus, lessening its weight on a credit report.
• If there is just one late payment, a lender may be willing to overlook and erase it from the record. Any requests must be made in writing.
Fix Credit Scores: Avoid these Mistakes
• Don’t lower credit limits because it will lower the gap between available credit and balances, which can lower a credit score.
• Avoid any late payments since they hurt good scores even harder than bad ones. They are not as damaging to an already bad score, but they should still be avoided.
• Consolidating accounts may lead to a big balance on one account as opposed to smaller balances on multiple accounts, which can hurt credit scores.