Your credit score number tells a lot about your finance handling capabilities. This number will determine your possibility to repay the loan given to you. Lenders will quickly give you the loan at the most favorable terms if you have a good score. If your credit score is bad then you have to improve it quickly. You can improve your credit score by following several steps. You need to establish a track record of paying bills on time and paying down debts.
You should get the help of free credit repair companies and ask them how long to fix credit. Then you will clearly understand how do credit repair companies work.
Steps to Improve Your Credit Scores
- Pay Your Bills on Time
Lenders always check how reliable a person is in paying bills when reviewing your credit report. Your past payment performance tells a lot about your future payment performance. So, if you want to leave a positive impact on the lender then you should start paying your bills on time. Paying late bills put a negative effect on the credit report.
You should also pay your loans, rents, utilities, and phone bills on time. It is best to use tools and resources for date reminders and automatic payments. These tools and applications will help you to make payments without any delay. Late and missed payments appear on the credit report for seven years and impact the score for a long time.
- Get Credit for Making Timely Payments
You can improve your score quickly if you are paying your utility and cell phone bills on time. You can factor those payments through a product like Experian Boost. You can use this product to connect to your bank accounts. Then it will allow you to quickly identify your utility and telecom payment history. After the verification of data, you can add it to the credit file. In this way, your score will be delivered in real-time.
- Pay off Debt and Keep Balances Low
Credit utilization is very important in building a better score. This is calculated by adding balances of your credit card and dividing the amount with a total limit. Just look at your all credit card statements to figure out your credit utilization ratio. Then divide all the statement balances of each month by 12.
People with good scores always have a low credit utilization ratio. Lenders want a ratio of less than 30% to give the loan. A low ratio means you have managed your credit card well. The right way to improve your credit utilization ratio is to keep the balance low and pay off debts.
- Open New Credit Accounts when Needed
You should not open new credit accounts just to make a credit mix as this will not going to improve the score. You can harm your credit in many different ways if you open unnecessary accounts. There will be too many hard inquiries that will tempt you to overspend.
- Don’t Close Unused Credit Cards
Keep your unused cards open if they are not costing you annual fees. This is a smart strategy as it will help to keep your credit utilization ratio low. If you close the cards then it can increase the ratio quickly. Keep the same in the open accounts to keep the ratio low.
- Don’t Apply for New Credit
You can quickly increase your credit limit by using a new credit card but it will lead to a hard inquiry on your report. Those inquiries can put a negative impact on your score. However, the impact of those hard inquiries stays on the report for two years.
- Dispute Any Inaccuracies on the Reports
You should always check your reports from credit report bureaus to avoid any inaccuracy. Any incorrect information will put a negative impact on your score and it is your responsibility to correct it quickly.
Look for reliable credit repair companies and ask them how do credit repair companies work to understand the process in detail.