“When you pay cash for everything, your credit score becomes irrelevant.” ― Steven Magee
We are aware, now more than ever, most business transactions are cashless but instead on credit. The system of credit has become invaluable, eventually replacing the use of cash. Goods are bought and sold in the credit form considered a promise to be paid in the future. The payment is in credit. Poor credit management may lead to enormous fiscal damage; good credit results in building a solid financial base.
Credit also helps to improve lifestyle; a fast acquisition of needs and services is on hand while adding up the score that builds trust and confidence.
Credit is money borrowed that may come from loans or credit cards. A dependable borrower is a person who makes timely payments for all credit accounts, until the fulfillment of the balance. It reflects good credit standing that translates to a good credit score. This score is the basis on which lending institutions based their approval for loans, charging variable interest rates, and even special offers and freebies to selected payers.
Also, other than financial lenders, a prospective employer may refer from your credit report and credit score for your employability. Other homeowners can refer to your credit history and the status of being considered a tenant. For insurance companies, credit is also a valuable guide when buying insurance.
Good credit standing is a relevant factor for eligibility for a student loan. Therefore, an unhealthy credit profile can make it very hard to secure additional credits and may even increase interest rates. A bad credit profile stays on your credit report for a couple of years, but the good news is, you can improve your credit profile. Let us take a look at some ways to fix your credit.
Check your credit report
A credit report is the primary source of information used to calculate your credit score.
High credit scores show positive information, while low credit reflects negative information. This report includes basic personal information, employment history, and detailed information on your public financial records.
It is necessary that you regularly check and review the information in your credit report as it affects many aspects of your life. You might see incorrect information or misspellings of your name on your credit report. Errors may be caused by cautious behavior such as identity theft or simply honesty, so we recommend that you file an appeal immediately.
Further, when you know what is negative on the report, you can take appropriate steps to prevent negative items in the future. Periodically check your credit report to better take control of your financial life.
Bring your accounts current and pay on time
A current account means there is no payment due because of the recent payment made, or only the minimum payment for the current month needs payment. When payment is more than 30 days past due, credit bureaus will reflect a report of late payment. Consequently, a credit report will reflect a late payment report. Updating your account means that you need to pay enough money to balance the balance accumulated since the last payment. It stops additional late entries on your credit report for that account. After you bring your account current, stay focused on paying on time. These schemes will have a positive effect on your credit scores over time.
Organize Bill Payments via credit card
Your payment history has a huge impact on your reputation. Another option to fix your credit score is to charge as many as possible, if not all monthly payments to your credit card. It means you have to pay your balance in full each month – simplifying bill payments and improving your credit scores due to on-time payments. This strategy is better when you choose one credit card to pay monthly bills. Choose the credit card with the highest credit limit and with superb opportunities for earning rewards. The use of one credit card for bill payments makes it easier to track and manage charges and affords you not to spend more than you can afford.
Your debt consigned to collections is a big NO!
The original creditor can send your overdue payment claim to a third party or agency for collection. Past due payments of 120 days late will have more impact than a 30days due. A debt sent to collections can have a severe negative effect on your credit scores and credit report.
If you’re having difficulty paying your bills due to unexpected expenses such as medical bills or loss of a job, the best thing to do is contact your creditors and ask for a payment plan preferentially you may request a reduction in the amount of debt owed.
Hold on to your unused credit cards
You will benefit from continued average credit history and a bulkier amount of available credit – these have a positive impact on credit scoring. In return, a reward is given for having a long-standing credit account and for minimal use of your credit limit.
A borrower has an individual credit utilization rate record. It is the amount of your revolving debt vis-a-vis your total credit limit. If you do not max out your credit utilization rate, it means you are qualified for a credit extension because you use credit responsibly. Financial experts advise keeping credit utilization below 30% at all times, or at best closer to zero. The termination of the credit account affects the amount of available credit.
Test your skills before applying for a loan
To fix your credit, do not get into loans for which you will not be eligible because they will be part of your credit file. It may potentially affect your future credit as lenders will see your applications – you need to protect your credit scores. If you need to borrow, examine the impact of your financial standing and capabilities. Look at your credit score and match them with legible loans available.
Be an authorized user of a specific credit line
When becoming an authorized user of a credit line, the obligation on the debt is on the primary account holder, not on you. You benefit from credit scores and available credit limits. This method will help you fix your credit at the same time, adding up available credit. It will improve your utilization rate without adding significant debt or hard credit pull.
Finally, have a definite plan. Follow it. Fulfill it
According to Tyler Gregory, “If you do not take good care of your credit, then your credit will not take good care of you.”
Credit is a part of the economy of our existence. To serve its purpose, you should be determined to take good care of it. To fix credit, you need a plan, sit down, and study your status. Come up with a realistic strategy as soon as you can. The longer you wait, the more you are digging a deeper hole into financial debt. Be committed to this plan, work harder, be smart and be courageous. Envision your ultimate victory – a fixed credit!
