Having good credit scores is more difficult today than it is to keep the economy's inflation rates low, and that is because there are innumerable new debt generating options available to people now. Yet, having good scores is absolutely essential if you are to take on any more debt in the future at reasonably competitive rates.
Bad scores only mean refused loan applications, for either they refuse you for being a high credit risk, or you refuse them for quoting horrendous interest rates. If you wish to spare yourself all that, here are a few steps to fix the bad scores fast.
Need for Good Credit Scores
Good scores make you eligible for other loans, say car loans or home loans, but they also give you better interest rates, as you pose of lesser risk to the lenders. Apart from this, the bonus is that, as they are a reflection of how you handle financial responsibility, they increase your probability of getting good jobs.
Many companies today check applicants' credit histories to gauge whether the candidates are responsible enough. To be on the 'A-class' list, all you need to know are a few repair tricks.
Ways to Fix Bad Credit Fast
Do not expect overnight results, and if anyone is promising them to you, you should know that they are lying. Just follow some of the steps given here.
Lower Your Debts
Paying off your loan installments does not work as fast on your score, as paying off revolving accounts does. So, you must shell out some money, and pay off your dues. Ideally, if you keep your debts below 30% of your limits, you will doing your scores a world of good.
Start Up a Budget
Disciplining yourself where spending is concerned, and curbing your spending habits with a tight budget is actually the best long-term way. It will help you from not creating newer debts.
Check Your Scores and Limits
If your lender shows lower credit limits than actually are on your card, your scores may get adversely affected. So it is always good to check on them periodically, and also ascertain if your lender has appropriately shown the right figures on your cards.
Older Credit History
Like aged wine, aged history gives out a better picture. If you have an old card lying around, you must start using it again; for this way, you keep updating those old accounts with the credit bureau. Old accounts show consistency of performance.
Credit Score Errors
Many a time, the easiest way is to identify and correct incorrect, negative information that the credit bureaus have on you. For example, if you had paid a bill on time, but the lender failed to report it as so, there will be a late payment mark adversely affecting your report. If these simple mistakes are corrected, your score automatically improves.
If you have small unpaid bill marks, you can consistently go to the bureaus, and contest their charge either as 'not mine', or as 'incorrectly stated as a late payment'. With old and small negatives, the bureaus do not take the verification efforts, and it is very likely that you will be let off the hook.
Nothing works better than generating goodwill. If you have consistently shown yourself to be a good borrower, you may be let off the hook for one delayed payment. A lender may choose not to report you as a late payment, given your good past record, and this will certainly help you.
Opening a bank account and always maintaining a healthy amount of funds in them, helps improve your score, as banks usually report this to the bureaus.
Retaining Paid Accounts
It is wise to let already paid accounts stay open, as this helps improve the credit to debt ratio. Improving this ratio is usually the fastest way to fix bad credit.
Though these were some effective ways to fix bad credit bast, they will not help you if you do not do them properly. The idea is to do good things, and to make sure that the credit bureau notices them. Good luck!
Disclaimer: This information is for reference purposes only and does not directly recommend any specific financial course of action.