by Susan Paige
Over half of America has a bad credit score. Their financial situation prevents them from getting loans, credit cards, and sometimes jobs.
If you’re in this half of the country, there’s hope for you to rebuild credit fast.
Follow these five methods and get back on the financial track.
1. Pay Bills
There’s no trick or magic solution, but paying your bills on time in the full amount helps repair your score.
If you’ve struggled with getting a loan for a car or home, it’s because the lenders can see your credit history.
They will deny your application if they see you can’t pay credit card bills or utilities. Additionally, any outstanding loans you have will also be factored.
Pay all credit cards, utilities, and loans in the full amount on time to avoid a negative impact on your credit score.
2. Reduce Debt
If you have other loans in your name, then it can limit your borrowing power.
Reduce your debt by paying down what you owe. Instead of making the minimum monthly payments, add an extra $50 dollars towards the principal.
For loans on vehicles or houses, this amount can improve your credit score and shave months or years off payments.
Be sure to check with your lender to see if there are early payment penalties.
3. Rebuild Credit Fast by Checking Your Credit Report
Have you actually seen your credit report?
The truth is that there are three different major credit bureaus – TransUnion, Equifax, and Experian. Each bureau has a credit history for you.
The scores may vary slightly, but you need to review the reports every year.
The Fair Credit Reporting Act gives you the right to obtain each report for free once a year. Take this opportunity to scan for errors in the reports.
Any errors found should be reported and filed to the appropriate bureau. Multiple errors will need to be individually disputed.
4. Small Credit Cards
The opportunity to open a new credit card should only be seized if it can help build your score.
Some lending institutions have credit cards designed specifically for credit score repair. The card is set up so you can’t overspend – whatever you deposit is your limit.
These credit cards for low credit consumers are a perfect way to quickly build your score.
5. Increase Your Limit
Your credit utilization has a direct effect on your score. If you have a $10,000 limit, but you spend $3,000, then you are utilizing 30% of your credit.
If your expenses are utilizing 40%-50% of the credit, then you might need to increase your limit.
Increasing your limit from $10,000 to $20,000 reduces your utilization from 40% at $4,000 to 20% at $4,000.
Be mindful of the credit limit increase. Many people start spending more just because they have the ability.
Raise the Score
Don’t be the half of the county that can’t get approved to purchase a car or home. Take these steps to rebuild credit fast.
Your financial future depends on the actions you take now.
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