Improving your credit score is an important part of your financial future. If there have been blotches on your credit score in the past, you may want to start working on fixing them before they become stains. Take advantage of the Fair Credit Reporting Act (FCRA) to get a copy of your credit report for FREE. so that you can see what your current credit situation is. Once you know your credit situation you can determine how to best fix it. Not sure how much your current credit cards are really costing you? Make sure you check out our free credit card payment calculator to get an idea, then take the below steps to heart.
The following 5 steps will help you fix your credit – try them today:
- Pay Your Bills on Time: Paying your bills on time for even 1 month can raise your credit score by a number of points. Paying your bills on time for 12 concurrent months will raise it quite a bit higher. Putting together a written calendar or an on-line calendar can help you remember what days each bill is due. Some online banking systems will even allow you to set up reminds for when your bills are due, take advantage of these if you have trouble keeping track of the dates. Writing yourself reminds or setting up auto bill pay on your bank account or credit cards will also help, make sure that you will have enough balance in the account before the auto bill pay goes into affect so that you do not rack up unexpected fees for bounced checks or lack of funds.
- Keep Your Credit Cards in Check: The offer of 20% off at a local store to sign up for their credit card may be hurting your credit score. Opening these accounts to get the discount and then closing them does not always help, closed accounts stay on your credit report for a number of months and may affect your credit score. If you do use credit cards, manage them wisely. Having low balances will incur less fees, and will make you look more responsible. On the other hand, maxing out your credit cards can lower your score and make you look like more of a risk.
- Don’t rely on Bankruptcy: While bankruptcy will wipe away some debt, it does not wipe it all away and can actually cost you quite a bit to file. Filing for bankruptcy can cost you anywhere from $300-$1000, consider how much debt you will actually be wiping out before you file. Also, filing will be a bad hit on your credit score and in some cases can drop your score a few hundred points. Bankruptcy’s can be reported in some states on your credit report for up to 10 years, so think about your future as well as your current position before you file. Some lenders will not even touch applicants that have a bankruptcy on their file.
- Open a Savings Account: You may not have a lot of money and you may think that this is a crazy idea, but putting $5 a week away will add up to $260 by the end of the year, plus interest. Taking a pro-active solution to your debt will help you in the future. Think about weather you need that next cup of coffee at the shop down the street or that over-priced soda at the gas station, and tuck that money away instead. A history of savings will not only help you on a rainy day, but will show creditors that you have good savings practices.
- Credit/Debt Counseling Agencies: There are a number of good debt management companies out there that can help your current situation. Look for a company that has a good reputation, is a Better Business Bureau member and multiple web searches before you pick a company to help you. A good company should teach you the skills you will need in the future to help you consolidate your debt, not just mysteriously be able to wipe away your bad credit. Taking care of your credit is like living a healthy lifestyle – it’s something that has to be learned and practiced, there is no “quick fix.”
Once your credit score is fixed you should work on keeping it up to par. In the digital world of financial numbers your good personality and helpful manners will not help you get a loan or a credit card, so keeping your credit score up will be your access to future financial stability. Following these easy steps will help you keep your credit score in check and improve your financial welfare, so start fixing it now!