If your credit is on the lower side, it may be time to make some changes. About 56% of Americans have awful credit. If you have poor credit, your loan request can be rejected or cost additional money in interest. Luckily, it’s possible to restore your credit by yourself. Here are 10 tips for repairing your credit.
Get Your Credit History
A report from the Federal Trade Commission said that one in four individuals have errors in their credit report. Each year, you want to get a copy of your credit history and comb through it to make sure that it’s 100% correct. If there’s a error, dispute it with each of the major credit reporting agencies –Equifax, TransUnion, and Experian.
Know Your Credit Score
Knowing your credit score is just one of the first steps in improving your credit history. Your annual credit report doesn’t show your credit score, therefore it’s important to use a service such as Credit Karma to retrieve your score and determine where you should start improving.
Monitor Every Dispute
It may take weeks to resolve a dispute through the credit reporting agencies. While it’s easy to stand back and let it work itself out, you have to stay involved until the matter is removed from your credit history.
Pay Your Bills
While it might appear obvious, among the greatest negative impacts on your credit history is a late payment of 30 days or longer. Late payments shows up in your credit history for at least seven years and can’t be eliminated if valid.
See Your Credit Utilization
Credit use is significantly harder to determine by yourself, but some sites like Credit Karma provide it. This score is a percentage of your credit versus how much you have remaining — the percentage must stay 30% or lower.
Use Credit Cards and Pay Them Away
One of the simplest ways to improve your credit is to keep on using your credit card after you have paid them off — failing to use a credit card may negatively affect your score. To prevent this, every now and then buy something on your credit card and pay it off in the end of the month.
Don’t Cancel Cards
It might seem tempting to begin canceling cards as soon as you have paid them off, but if you cancel credit cards you are decreasing your available credit use score. In the long term, it is far better to leave old credit cards available.
Keep Old Debt
There’s good and bad debt. Very good debt is debt that you’ve managed and paid as agreed–some instances include a car or house loan. This kind of debt shows a good history, which positively reflects in your credit history. If you will need to buy another house or car, this report may get you a better loan.
Use Credit Inquiries Wisely
Whenever you apply for a credit card, loan, or perhaps a utility, your credit is assessed, which shows up as an inquiry on your credit history. Every investigation reflects badly on your credit report. The fewer the questions, the better.
Enhancing your credit doesn’t happen overnight. Sometimes it may take years for your score to become positive. Disputes can take weeks to fix, and when it’s negatively affecting your credit history your score won’t rebound as soon as you report the mistake.