What Causes Bad Credit Score?
A maxed-out credit card, filing for bankruptcy, skipping a loan payment are some of the many reasons you can get a bad credit score. Timely payments of your credit and the total debt you have can have a big impact on your credit score. Defaulting in those areas will cause your credit score to have negative side effects. A bad credit score can have severe impacts on your life like:
1)You will find it hard to get loans or get a credit card
2)Interest rates on loans will be high
3)Security deposits for your assets will be high
4)Insurance premiums too will be high
How To Rebuild Your Credit Score
If you are planning to buy a house or a new home or are in need of a new loan, improving your credit score is a good goal. Fixing a bad credit score can take some time from maybe several weeks to several months. The sooner you start fixing it the sooner you will be able to enjoy the results.
Focusing on the following tips will ensure that your credit score improves over time.
1. Know Where You Stand With Your Credit Report
It is important to start with understand what exactly your financial situation is. A history of your credit report discussed with experts will help you know how to fix credit and comprehend what is and what isn’t working in your favor. Low Credit ard balances, missed payment, and loan accounts are some elements that can add to a bad credit score.
2. Look For Errors on Your Report
The best way to keep inaccuracies from damaging your credit score is to monitor your credit on a regular basis. Incorrect information like personal information, debts of a spouse, or older debts that are paid but do not reflect are common from time to time. Make sure all your credit report has been clear of incorrect information and common errors.
3. Dispute If You Have Errors
You have the right to dispute any errors you find in your credit report. You can do this by personally taking it up with the relevant bureau or allow your credit handling experts to do it on your behalf. Normally a 30 day period is granted to dispute any error. Errors can sprout from many sources and affect your credit score negatively.
4. Make Sure To Pay New Credits First
A credit card that is maxed out can reflect badly. If you cannot increase the credit limit on it, make sure you pay the new account first. A loan with high-interest rates or installment on a new loan should be a priority to be paid first. This will improve your score and also might help you increase the time period of your credit.
5. Resist The Temptation For A New Credit Card.
Even if you are getting a discount or a Gift card on your purchase from a certain type of credit card, it is advisable to steer clear from taking a new one. An inquiry made on you before you get a new credit card when you have a bad score can impact your score even further down.
A Good Credit Score Will Open More Doors For You
A good credit score is important for your overall well-being. It’s recommended to do all you can to keep your score good. Regularly checking your credit balance is a good start. You might even come across some expenses which reoccur constantly but are not important or essential thereby helping you eliminate unwanted credit.
Having a good credit score can help you in getting a future loan for your dream house or car when you are ready. Go ahead and protect your dreams!