Few Steps to Save Your Credit

by / Wednesday, 20 December 2017 / Published in Credit Score/Report, Tips

When you do not have a favorable credit status, it can be difficult for you to qualify for loans and credit cards. On the credit score that falls at or below 619 is considered as bad or poor credit. When you have low credit score you might have to settle for loans with less desirable terms that can make the loan expensive. You may also have to pay high insurance premiums due to bad credit score. Besides, there are several employers who check credit reports before they decide to hire their employees.

A few simple steps can easily help you in improving your credit score. If you have an average credit score you may want to upgrade it to a good range and if you have good credit you might want to upgrade it to an excellent rating. But when you credit rating is poor, it is very important that you work to improve it. Rebuilding your credit does not have to be difficult whether it was due to divorce, bankruptcy or you made mistakes with your finances. All you should have is patience and a proper plan so that you can save your credit and rebuild it to an excellent credit rating. Some of the steps that you can take to save your credit are-

Check Your Credit Report Regularly

Know where you stand financially. For that you should check your credit report regularly and find out where you need improvement. Have you missed payments? Do you have multiple debts? Is your debt utilization high? Such clues will help you to figure out what you should tackle first. Everyone is entitled to one free report every year from each of the three credit bureaus. You can order for your reports directly from the credit bureaus.

Once you have the reports you can check for errors or any fraudulent accounts. Due to errors your credit score may have diminished. Once you have carefully gone through the report and if you find anything inaccurate then dispute it and fix the problem. Also do not forget to bring into attention to the credit bureau if you find any fraudulent accounts and get them removed. In order to avoid further identity theft you can freeze your account.

Try Catching Up On Your Payments

If you are lacking behind on your payments, you should take the necessary step to catch up so that you can improve your credit situation. Your payment history is the largest factor that affects your credit score. Keep all your accounts up to date. If you are unable to repay you can contact your creditors and work out an affordable payment plan. When contacting your creditor, be up-front, explaining your situation and let them know that you are willing to pay your obligation. Let them know how much you can afford to pay and how long you will need to pay off your debt.

Pay Your Bills On Time

Pay all your bills on time, be it a credit bill or a non-credit bill. At many times, your missed utility payments or late rent payments may get reported to the credit bureaus. Since payment history is important, it is important to establish a reliable pattern in order to rebuild your credit. Try your best to avoid reports such as missing payments, late payment and so on. Instead opt for automatic payments so that you never miss the payment date.

Avoid Closing Credit Card Accounts

The longer your credit history is, the better your score will be. So as far as possible, avoid closing credit card accounts. But if you are far behind in your payments then closing it might be the only choice left for you.

Pay Down Debt

Your credit utilization plays an important role on your credit score. Credit utilization is a measure of the amount of debt that you have. So try to keep your credit usage to minimal to avoid getting into credit issues and try to create a plan that will help you to pay down your debt a little faster.