How to Repair Credit In 7 Easy Steps

How to Repair Credit In 7 Easy Steps

Credit scores are very important numbers in people’s lives. A high credit score means you’re a low-risk borrower, which means you have access to more financial opportunities. High credit ratings and scores can help you get approved for credit cards, car loans, a house mortgage, and more. But what happens when your score drops? How do you repair your credit? Fortunately, some steps can teach you how you can fix bad credit.

Seven tips to fix bad credit

  1. Secure a copy of your credit report. You can get a free copy of your report from each of the three major credit bureaus from AnnualCreditReport.com. This will help you see your current credit situation.
  2. Check your credit report for errors. Be meticulous, and if you find any errors, dispute them with the reporting credit agency. You have a right to check your score for errors under the Fair Credit Reporting Act or FCRA.
  3. Pay off your debts and improve your payment history. One of the best ways to repair credit is to pay your bills on time. It’s not news to you that if you miss a payment, it will impact your current credit score.
  4. Keep your credit cards on low balance. It is inevitable financial emergencies can happen, and you may not have the money to make total payments every month. However, limit your credit utilization to at least 30 percent of your full available credit.
  5. Think twice before opening another credit card. A hard inquiry happens every time you apply for credit cards, which will hurt your score—adding more cards will not help how to fix bad credit. FICO scores, the most widely used scoring model, also look at how many credit accounts you opened in a short period.
  6. Repair your credit with Secured Credit cards. This is the best alternative to help you rebuild your credit history and score. It’s easier to get approved, although it requires a deposit and could have higher interest rates.
  7. Create a budget and follow it. Stay away from unnecessary purchases, and don’t charge anything that you know you can’t afford to pay. In short, live within your means. It’s not easy, but you can say “no” every time you get tempted to buy something that is not within your budget.

Bottom Line

You may be asking now the “how to fix my credit myself” question. Repairing credit scores doesn’t happen overnight, but it is possible. Some people even have to seek help from credit repair agencies to get back on track. It won’t be easy trying to catch up but stick to your goals, and eventually, you will see an improvement in your score.

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