Tag Archives: improve bad credit

5 Techniques to Enhance Your Credit Score and Gain Access to Better Loans

In order to be eligible for a loan, you must demonstrate that you can repay the debt to the lender. This is typically evaluated by inspecting your credit report from a Credit Bureau. This report provides the lender with the necessary information to build a thorough profile of your credit risk.

Lenders will use the information gained to see how much you qualify for and if you will be accepted for a loan amount. Various elements are taken into consideration when deciding your credit limit and loan approval. The criteria that creditors utilize to assess your borrowing capacity are referred to as the 5 Cs of Credit.

If you can master any of these five elements, then you will be in a better position to qualify for higher loans.

The 5 Cs of Credit

The 5 Cs of Credit are a set of criteria that are used to assess the creditworthiness of an individual. Understanding these 5 Cs is essential for obtaining the best possible loan terms.

When someone applies for a loan, banks and other lending institutions use the 5 Cs of credit to evaluate the borrower’s creditworthiness and overall financial situation. This system allows lenders to take into account factors such as the applicant’s ability to repay the loan, their credit background, and the risk linked with the loan request.

The 5 C’s are: Character, Capacity, Capital, Collateral, and Conditions.

Let us examine each of these aspects in more detail and explore why they are significant.

  1. Character: This is evaluated by checking the borrower’s payments and credit behavior. Loan providers will look into the applicant’s credit report, including any payments made and debts owed.
  2. Capacity: This involves the ability to pay back a loan you have requested. Lenders will investigate the amount of money coming in to make sure it is enough to handle the debt. In the event that the income is too low, the borrower may be deemed a risky choice.
  3. Capital: This is linked to the borrower’s net worth or assets. Loan providers will assess their financial situation to make sure they have enough assets to cover the loan in the event of non-payment. If the applicant holds any relevant investments, they may be seen as a less risky option.
  4. Collateral: This is the value of the assets that the borrower can put forward as security for the loan. Lenders will typically ask for collateral to reduce their risk in the case of a default. The value of the collateral will be analyzed to make sure it is adequate to cover the loan.
  5. Conditions: This is in reference to the borrower’s financial situation and the state of the economy. Loan providers will look at the borrower’s industry, the economic landscape, and other factors which may affect their ability to repay the loan.

How To Improve Your 5 Cs of Credit

Change Your Habits

Your credit report serves as a record of your financial conduct, which lenders assess in order to determine if you are reliable enough to grant a loan. If you are guilty of misusing loans, defaulting, or making late repayments, it’s time to make a change. Let’s break down 3 strategies that will increase your likelihood of loan acceptance:

  • Ensure your loan repayments are on time to show lenders that you meet your loan obligations punctually and in full. They are more likely to trust you if you do this.
  • Update your credit report regularly and get a clearance certificate once you have cleared all your loans.
  • Stay away from practices that promote bad credit like exceeding your credit limit or becoming overly reliant on loans. When dealing with credit cards, ensure you pay your bill on time, and if you can’t, at least pay the minimum amount. Furthermore, stay away from tactics like co-signing for somebody with a low credit score or taking out numerous loans at once.

Work on Improving Loan Repayment Capability

When trying to raise your credit, demonstrate to a loan provider that you are capable of settling a loan. They will take into consideration your wages, current debts, and salary to evaluate your credit capacity. Do you have a job that is likely to provide enough money to make loan payments? Are you self-employed?

Improve your capacity in the following ways:

  • Reduce Your DTI: This is the rate of your monthly income that goes toward repaying debts. The lower your DTI, the better your credit capacity. Therefore, work on increasing your earnings and paying off any outstanding debts to reduce your DTI.
  • Have Multiple Streams of Income: Are you self-employed or employed in a job that does not provide secure income? Consider multiple income streams like rental income, freelance work, or a part-time job. By exhibiting steadiness in your income, you can improve your credit capacity and raise your chances of getting approved for a loan.

Grow Your Capital

Your financial standing is what one would refer to as capital. It indicates what available assets you have that are not currently pledged to a debt. Lenders will want to be assured that you have assets such as real estate, property, investments, or money in the bank to use as collateral when you don’t have sufficient income.

What would happen if you no longer had the means to make loan payments?

Loan providers take into consideration your capital when evaluating your creditworthiness, however, it is not given to them as collateral for the loan.

In order to grow your capital, it is advisable to:

  • Set up an Emergency Fund to serve as your financial standing: Setting aside a portion of your income in a savings account for emergency use can help you avoid difficulties if unexpected expenses or financial hardships arise. This can be a safeguard against defaulting on loans or credit payments, which can have an adverse effect on your capital.
  • Be prepared to liquidate your assets: Have a ready stock of assets that can easily be converted to cash. This can be resources or other investments that you can sell in a hurry. Holding these assets allows you to display to loan providers that you have a strong economic base and are less likely to fail to make payments.

Strengthen Your Security

When a loan is taken out, collateral can be put up by the borrower to guarantee repayment. It is essential to be aware of any available collateral, especially for secured lenders. If a person has a poor credit score or financial capacity, collateral can be a helpful resource to obtain a loan.

However, in order to be accepted as a form of collateral, the lender must set their own threshold. The loan-to-value (LTV) ratio must be satisfactory for the lender.

The manner in which you enhance your collateral will be dependent on the type of collateral you possess. When you are looking to borrow with external collateral, such as for personal loans, mortgage refinance, and logbook loans, there are three ways to increase your Loan-to-Value ratio. These include:

  • Improve the worth of your collateral: If you would like to use your house as a form of security, you can make investments in renovations to lift its market value before seeking a loan from a lender.
  • Lower your debt-to-collateral ratio: Creditors focus on the amount of debt you have compared to the collateral. For instance, if you have an existing debt on your house, the ratio can be quite high as you will have less equity. Therefore, it may be difficult to acquire a larger loan.
  • Obtain a co-signer: This individual can help you qualify for a more substantial loan by using their own assets as a form of security.

Enhance Borrowing Conditions

When compared to the other 5 Cs of Credit, conditions are much more expansive. Prior to providing you with a loan, lenders will take into account factors which you have no control over. They may examine the current economic climate and the systematic risks that come with it, such as currency or interest rate risks.

In order to enhance the last C on your credit report when you take out a loan, here are some tips:

  • Have a clear goal: Loan providers want to be sure that you will be using the money for a valid reason and that you have a plan to repay it. Whether you’re establishing a business, funding your education, or making a large purchase, having a clear goal in mind for the loan can increase your chances of your loan being approved.
  • Grow your assets: Think about any resources you can use as security, such as real estate, vehicles, or investments accounts. Having these assets in your portfolio allows you to use them when you need to take out a loan.
  • Time your borrowing: The economic environment can have an effect on lending conditions, and lenders take this into account when looking at your loan application. When interest rates are low, it might be a good idea to borrow, as you may be able to get a lower rate. On the other hand, if the economy is facing a recession or high systematic risk, lenders may be extra cautious when giving out loans. Consider timing your borrowing so that you can take advantage of favorable economic conditions.

Benefits of High Credit Scores

  1. You will get lower interest rates and more attractive loan terms. This can save you thousands of shillings throughout the loan’s lifetime.
  2. You get a shorter and faster loan application process.
  3. You might be hired by an employer easily as higher credit scores demonstrate financial integrity.
  4. It increases your negotiating power with lenders. Enabling you to choose the best loan terms as most lenders will be competing to do business with you.

CONCLUSION

It is important to note that it takes sustained hard work to boost credit scores; this means keeping up with solid financial practices and handling debt reasonably. The 5 Cs can be a beginning point, but they are not the only elements a lender will look at. 

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this. 

Consequences of Having a Poor Credit Rating

Obtaining a credit card, car loan, or mortgage can be particularly difficult if your credit rating isn’t up to par and, even if you qualify, you may still have to pay a higher rate of interest. Plus, a poor credit score can influence a job search or apartment hunt as employers and landlords tend to prefer those who have proven themselves to be financially dependable.

The consequences of having a low credit score can stretch quite wide. But you don’t have to let poor credit history get in the way of your long-term financial goals. Let’s evaluate the main implications of a bad credit score.

Fewer Credit Card Options

Those with poor credit scores may find that they have fewer credit card choices available and interest rates may be higher.

Individuals with lower credit scores may find credit cards available to them, but these will not have the same advantages as the top credit cards accessible to those with higher credit ratings. The interest rates on these cards can be as high as 29 per cent, in contrast to the current average of roughly 17 per cent. When your credit score is good, there are lots of great credit card choices available to you with lower interest rates and beneficial cardholder perks (like travel points).

Increased Cost of Insurance Coverage

Generally, credit scores are utilized to figure out how likely it is that a person will be delinquent on their credit. This means that the lower your rating is, the greater chance the lender thinks that you will neglect to make a payment. When buying insurance, you also have an insurance score that resembles a credit score (and relies upon much of the same info), but it also considers how prone you are to submit a claim.

Much like a credit score, an insurance score considers your payment history, total debt, credit history duration, new credit, and credit mix to determine the cost of your policy. Generally, the higher your insurance rating, the lower your insurance premiums will be. It is worth noting, however, that while credit scores and insurance scores are similar, they are not necessarily the same.

Pricier Car Loans

When applying for an auto loan, your credit history will have an impact on your success in both acquiring a loan and the interest rate you are offered. Those with good credit can often find auto loan rates as low as 4.19 per cent, while those with poor credit may have to accept rates as high as 20 per cent.

An Increase in Mortgage Interest Rates

Mortgage providers tend to worry that those with a poor credit background will be unable to meet the payments on a mortgage. There is no specific credit score that will immediately stop someone from obtaining a loan, but having a low score can make it difficult to find an issuing lender. Even if a loan is acquired, a lower credit score often leads to higher interest rates, meaning the overall cost of buying a home is much higher.

Steep Rent Rates

When assessing prospective tenants, some landlords opt to conduct a credit check in order to judge whether the applicant is financially reliable and likely to pay rent on a regular basis. They will be allowed to view the credit report, but not the score itself. Additionally, they can view the portion of the credit report that displays the payment history and determine if the person has ever been evicted in the past, which could affect their decision.

Those with a lower credit score may find it more feasible to rent from a landlord with a smaller portfolio, as large property management companies are typically more likely to do a credit check. This could result in the need for a larger initial payment. A co-signer with a good credit record might give a landlord assurance that the rent will be paid each month.

Security Requirement for Utilities

Security deposits are sometimes requested by utility companies for service activation. These amounts are paid up front as a guarantee that all bills will be paid in full. Therefore, customers are often required to pay a certain amount prior to the start of service.

When signing up for utilities, the company looks over your credit report, particularly your payment history. If you have a bad track record with payments, they may require a deposit to set up your account.

The Federal Trade Commission (FTC) stipulates that utility companies cannot require deposits from some new customers and not others. However, many providers waive deposits based on meeting their credit criteria. Thus, the lower your credit score is, the more probable it is that you will need to pay a deposit to open an account. Additionally, some utility companies may accept a letter of guarantee, which is a document from someone who has consented to cover your bill in the event you are unable to make the payment.

Rejected Job Applications

Attempting to get a job and having unsuccessful applications can be a discouraging experience. Nevertheless, it is important to keep in mind that failure is a natural part of the process and that one should not give up. Learning from the mistakes made and continuing to apply for job opportunities is the best way to get closer to achieving your goal.

When looking for a job, a person’s credit score can be a deciding factor in whether or not they are hired. Employers may look at an applicant’s credit history to get an idea of how dependable and trustworthy they are. If the credit report shows an individual has had difficulty with payments or has a history of not paying back loans, this can be seen as a warning sign to employers that they may not be reliable employees.

Starting a Business Can be a Challenge

You often have to spend money in order to make money, especially if you’re starting a business. Unfortunately, if your credit score is low, it can be difficult to obtain a business loan or credit card with appealing rates. Even if you can get a loan with a low credit score, you are likely to receive a lower loan amount and higher interest rates than if you had a better credit score.

So, to sum up: 

Having a bad credit score can be a hindrance when applying for credit cards, loans and mortgages, and can even have an impact on your job prospects. However, there are multiple ways to improve your credit history and build your credit score. Start by making all your payments on time for every credit card and work on paying off old debt. Applying for a secured credit card or personal loan is another way to build up a positive credit history and increase your available credit. You should see an improvement in your credit score as you practice good credit habits and use credit responsibly.

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this. 

14 Strategies From Experts To Increase Your Personal Credit Score

A variety of components, ranging from credit card balances to payment history to recent inquiries, are taken into account when calculating a person’s credit score. By keeping a high credit score, one can benefit from loans with lower interest rates and higher credit card limits. But having a low credit score can hold you back from reaching financial and lifestyle goals.

It is possible to improve a low credit score with proper effort and the right strategies. The following tips from the Forbes Finance Council provide useful advice for someone looking to increase their credit score.

1. Obtaining a Credit Card with a High Credit Limit

Antoine Sallis of Pacc 10 Enterprise asserts that a secured credit card with a high limit can drastically improve a low credit score. This is because revolving accounts like credit cards yield more points than installment accounts, such as car loans. However, it is important to ensure that the credit card utilization rate is kept at a maximum of 10%.

2. Keep Your Balance Low at the End of the Month

To maintain optimal credit health, it is best to refrain from nearing your credit limit at the end of the month. If a credit bureau records that you have exceeded your credit limit, even if you pay off the balance in the following week, it can negatively affect your credit score. If needed, it is advisable to make a partial payment before the end of the month. –John Abusaid, Halbert Hargrove

3. Make Payments That Exceed the Minimum Balance

When it comes to credit cards, it’s important to always make payments on time, and pay more than the minimum. Additionally, reducing the amount of credit used on the card with the lowest limit is recommended. To maximize your credit score, it’s best to keep your balance from reaching the limit. Moreover, it’s beneficial to keep cards that you’ve had for a while, as long as you are in good standing; this helps your score. –Sheryl J. Moore, Wink, Inc.

4. Establish Automated Payments

To avoid missing due dates and an associated decrease in credit scores, I advise student loan borrowers to take advantage of automated payments that are available through most billing platforms. This is especially critical since payment history is a huge factor in the FICO and VantageScore systems, and late payments can cause a decrease of up to 100 points that can remain on credit reports for nearly 8 years. – Tony Aguilar, Chipper.

5. It’s Recommended to Utilize Only One Credit Card

Opt for one credit card for all purchases. Charging a bit on various cards does not have a positive effect on your credit score. Instead, make one card your go-to and clear out the smaller balances on the other cards. Having one bigger balance (which should be less than 10% of the limit on that card) and a few “zero” cards is a better move to build up your credit score than having a few smaller balances. –Luz Urrutia, Accion Opportunity Fund.

6. Ensure That Your Credit Card Debt Is Below 20%

Approximately two-thirds of your credit score is determined by how promptly you pay the debts and the balance of your credit cards. Ensure your payments are kept up-to-date to reflect your current debt and aim to have your credit card debt below 20% of the limit. A good way to reach this point is to request a credit line increase. However, be disciplined enough not to keep using the card afterward. – Will Tullos, Reliant Mortgage LLC.

7. Begin by Eradicating Your Lowest Balances

In order to improve your credit score, Shashank Shekhar of InstaMortgage suggests a strategy for paying down credit card debt. Even if you are unable to pay it off in one go, paying off the smallest balance first and then working your way up can be beneficial. This method can yield positive results in less than a year.

8. Keep Track of Your Credit Utilization

Maintaining a healthy credit score can be achieved by maintaining an awareness of one’s credit utilization rate. It is important to not overuse or max out any single credit card but to use various cards instead in order to keep the percentage in line. –Mara Garcia, Phonexa Holdings, LLC

9. Improve Your Financial Literacy

Americans are faced with a multitude of financial decisions and without the proper knowledge, it can be challenging to make prudent choices. Paying off debt and avoiding late payments are important for maintaining a good credit score, but with increased financial education, individuals can be better equipped to manage their finances and move closer to their financial objectives. –Kathleen Craig, Plinqit

10. Build a Well-Balanced Program

It is possible that a low credit score is due to either late payments or an abundance of credit card debt. To address late payments, one should keep track of recent late payments, and then contact the creditor to see if they will forgive any late fees. To address high debt, set a specific date to pay it off, budget, and strive to find another source of income to stay on track. –Jose Rodriguez, Got Credit?

11. Challenge Any Inaccurate Information Forcefully

In order to raise a low credit score, you should initiate disputes with all three credit bureaus in regard to any incorrect items. Be persistent. Take care of any unpaid items and establish automatic payments for your credit card, ensuring that you pay off the balance every month. Afterward, file additional disputes. Being assertive when dealing with them can make a difference. – Amariah Olson, Yield Crowd. (You can also engage a credit repair company to file disputes on your behalf as they are highly experienced in this.)

12. Take the Time to Examine Your Comprehensive Credit Report Thoroughly

Consult your credit report to determine which actions will be most successful in increasing your score. A credit report will provide you with details regarding your payment history, amounts owed and new credit. Moreover, you may even spot an inaccuracy. According to research found in Consumer Reports, 34% of Americans have a mistake in their credit report. Resolving an error can provide a rapid and considerable boost to your score. – Evan Siegel, eGain.

13. Keep Your Oldest Credit Cards

In my profession, numerous retirees have difficulties due to their preference not to use credit cards and opting to pay with cash. Many retirees opt to close their old credit cards due to the lack of use. Maintaining a strong credit rating can be accomplished by keeping the oldest credit cards with higher credit limits open. Use them and pay them off regularly. –Trevor Wilde, Wilde Wealth Management Group.

14. Utilize An Installment Loan To Settle Your Credit Card Debt

You can improve your credit score quickly by obtaining an installment loan and using that money to pay off your credit card debt. Doing so will decrease the amount of debt you have on the cards and ideally keep your utilization for each card below 30% – which will then lead to an increase in your score. – Cynthia Hemingway, Fourlane, Inc.

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this. 

4 Tricks to Boost Your Credit Score Fast

Having a good credit score helps you get lower interest rates on loans and credit cards. However, raising your credit score overnight is not always simple. You must first determine why your credit score is low before you can improve it.

Jim Triggs, president and CEO of nonprofit credit counselling firm Money Management International, Inc (MMI), tells CNBC Select that understanding the specific factors affecting your credit score is the first step towards raising it quickly. Here are some tips and tricks from Triggs and two other experts on how fast your credit score can rise and how to make it happen.

Reduce your outstanding credit card balances.

Paying more than your minimum payment each month, if you can, is a great way to chip away at your revolving debt and maintain a low credit utilization rate. Keeping your credit utilization rate low is particularly critical if you have a lot of revolving debt.

Seeing the impact on your credit score depends on how quickly creditors report the fulfilled balance on the consumer’s credit report, says Triggs. “Some creditors report immediately after the payment, while others report at a particular time each month,” she says. Credit card companies usually report your statement balance to the credit bureaus monthly, but this may vary depending on your issuer. You may call or chat online with your issuer to find out when they report balances to the bureaus.

It is better to pay off your balance each month as soon as possible. You may also make multiple payments towards your balance throughout the month to keep track of your expenditures, which makes it easier. Although it’s good  to pay even a portion of your debt off, paying off the entire amount will have the greatest and fastest impact on your credit score.

Increase your credit limit.

There are two ways to increase your credit limit: you may either ask for an increase on your current credit card or open a new one. The lower your credit utilization rate is (assuming you do not max out your card each month), the higher your overall available credit limit is. Credit utilization is the amount of credit being used relative to the amount of credit available. Before requesting an increase in your credit limit, ensure that you will not be tempted to spend more than you can afford.

Before you apply for a new credit card, do your research. Your credit score is determined by the number of times you apply for and open accounts. Every application requires the credit card issuer or lender to pull your credit report, which results in a hard inquiry and dings your credit score a few points. And be careful not to apply for too many credit cards in a short amount of time, as this may send a red flag to issuers. Issuers may have stricter terms and requirements because of the economic fallout from the coronavirus. 

There are some credit cards available for those with poor credit, but most of the top reward cards require excellent credit. The Petal 2 “Cash Back, No Fees” Visa Credit Card has no fees whatsoever, and allows applicants with no credit history to apply.

Make sure your credit report is error-free.

Checking your credit report for any errors that could be negatively impacting you can help you increase your credit score quickly. If you are able to dispute them with proof and have them removed, your score may improve.

It is important to take the time to review your credit report, as about 25% of Americans have an error on theirs. Fraudulent or duplicated accounts, as well as misreported payments, are some of the most common mistakes to look for.

According to financial educator Thomas Nitzsche at MMI, most of the clients they meet with have not reviewed their report in the last year, and are often surprised by what they find and want us to discuss with them. By going to AnnualCreditReport.com now, you can get a free credit report from the three major credit bureaus (Experian, Equifax, and TransUnion).

Request that the negative entries on your credit report be removed.

Having a lot of late payments on your credit report or an old collection account that has since been paid off showing up may be the problem. Ask to have them removed if this is the case. (And if you do have an unpaid collection account, make it a priority. Unpaid collection accounts can have a negative impact on your score.)

It may take longer and require more effort on your part, but it is worth it. Triggs recommends contacting the collection agency, debt buyer, or original creditor (depending on who currently services your account) to have a paid-off account removed from your credit report. 

It might be best to request for the account to be removed entirely, rather than just showing as paid, as this would have a more significant impact on your credit score, Triggs says. Unpaid collection account or unpaid charge-off on your credit report might prevent creditors from granting you future credit.

Doing this on your own might be overwhelming and stressful at times. You can use a credit repair company to help you out. They know the federal laws and they take charge on your behalf helping you resolve the issues you might have. 

Wrapping up

There is no one solution that fits all when it comes to improving your credit score, but you can immediately take these four steps to clean up your credit report. According to Equifax global consumer solutions president Beverly Anderson, every person’s credit journey is unique. There are many factors that affect credit scores for the majority of consumers, but they will not always have the same impact.

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this. 

The Ultimate Guide to Increasing Your Credit Score 

Have you ever wondered how credit scores function and how to boost yours? This article will discuss the fastest and most effective way to improve your credit score. In April 2018, Tatiana Homonoff, an Economics and Public Policy professor at New York University, published a paper on credit scores summarizing her two-year study on the subject. To help anyone improve their credit score, she recommended pointing them toward two relatively easy components: paying bills and using credit cards judiciously.

According to Homonoff, paying bills on time and keeping track of credit usage are two things that people can do with ease, despite being in a difficult financial situation. However, she recognizes there are some areas of the credit score algorithm that are virtually impossible to impact.

Let’s dive into how credit scores work and provide some pointers on how to improve yours.

What Is a Credit Score?

A credit score is your credit history quantified into a number to estimate how likely you are to repay any loans. A credit score of 300 to 850 indicates a good credit history, including timely payments, low credit usage, and long credit history. Those with lower scores are considered poor investments due to late payments or overextended credit use.

There are no set cutoffs for either excellent or poor scores, but there are guidelines for each. Lenders generally consider scores above 720 as ideal and scores below 630 as problematic.

People are becoming more aware of how raising their credit score improves their financial outlook, and Homonoff’s study provides evidence of this. Consumer behavior improved dramatically when people were aware of their credit score, according to Homonoff.

“People who thought they had excellent scores discovered that they had overvalued them. They stopped paying late, paid down their balances, and as a result, their scores improved.” Homonoff said. 90% of businesses in the United States use the FICO credit score to determine how much credit to provide consumers and what interest rate to charge them.

The formula used to generate your credit score involves five major components:

  • 35% of the score is based on payment history. 
  • 30% is based on the amount owed. 
  • 15% is based on the length of credit history. 
  • 10% is based on your credit mix, i.e., mortgages, auto loans, credit cards, etc. 
  • 10% is based on new credit.

Credit scores are subject to change as you move through life. Your credit score will rise if you are timely in paying your debts, particularly credit cards and installment loans. When you use credit more often, whether you have more credit cards, get a mortgage, take out a student loan, or take out an auto loan, your credit score reflects how responsible you are with more debt.

13 Tricks to Increase Your Credit Score

Are you one of the many people who don’t know their credit rating? Good news—, you can get a free credit report from the top 3 bureaus annually. Discover Card gives you your FICO score, which is utilized by 90% of businesses that offer credit. Capital One, Chase, and other credit cards offer you Vantage Scores, which are similar but not identical. Sites like Credit Karma, Credit Sesame, and Quizzle work the same way.

Vantage Scores are generated using the same data as FICO, but the weighting of elements may be different, resulting in slightly different scores. It’s possible that your score might not be as high as you hoped. Homonoff suggests some ways to improve it:

1. Regularly Review Your Credit Report

You can request one free credit report from each of the three credit bureaus every year, and doing so will not negatively impact your credit score. Examine each report carefully for mistakes. Dispute those that you discover. This is the closest you can get to a fast credit fix.

A government survey discovered that 26% of people have at least one critical mistake in their report. Some mistakes are simple, such as misspelt names, addresses, or accounts registered to the wrong individual. Other issues are more serious, such as accounts that are incorrectly recorded as late or delinquent, debts that are listed twice, accounts that are listed as open when they are actually closed or accounts with inaccurate balances or credit limits.

Talking to the credit reporting agency to work on fixing incorrect or out-of-date information is a simple way to boost your score. A significant percentage of consumers whose information was incorrect saw their credit score increase as soon as the error was eradicated.

2. Set Up Payment Reminders

Create a timetable and set up online reminders to keep track of when you must pay your bills. In a few months, consistent bill payments will raise your score if you pay on time.

3. Make Multiple Payments During a Billing Cycle

Paying down your bills every two weeks rather than once a month lowers your credit utilization and improves your score. If you can afford it, do so.

4. Contact Your Creditors

If you miss payment deadlines and cannot pay your bills, set up a payment plan with your creditors immediately. A quick response can help ease the adverse consequences of late payments and high outstanding balances.

5. Apply for New Credit Sporadically

When you apply for or open several new accounts in a short time, it hurts your score, even though it increases your total credit limit.

6. Keep Unused Credit Card Accounts Open

Older credit histories are better, and the length of your credit history matters. If you must close credit accounts, close the newer ones.

7. Pay Attention When Paying Off Old Debts

A debt that has been “charged off” by a creditor is one that they do not expect further payments on. If you make a payment on a charged off account, it will be reactivated and your credit score will drop. This process is often employed by collection agencies.

8. Prioritize Paying Down “Maxed Out” Credit Cards

Pay off the credit card with the highest balance first if you have multiple credit cards and the amount owed is close to the credit limit.

9. Have Multiple Accounts for Diversification

Your credit score is determined by the proportion of different credit items—mortgages, auto loans, student loans, and credit cards—you have. Having more elements in your current credit mix is beneficial as long as you make on-time payments.

10. Go Loan Shopping

If you have bad credit and can’t find any other method to boost your score, you may opt for a “fast loan.” These are usually loans for small amounts—$250 to $1,000—that are reported to credit bureaus and can become a favorable item on your credit report. This should be a last-ditch effort.

11. Check Your Qualification for a 0% Interest Card

There are several companies that provide cards with 0% interest on balances, but there are restrictions to this. Typically, there is a transfer fee and the 0% offer lasts for up to 18 months. You typically need a very good credit score to qualify for one of these.

12. Have a Debt Consolidation Plan

It is true that enrolling in a debt consolidation program can temporarily lower your credit score, but as long as you make on-time payments, your score will improve quickly and you will be eliminating the debt that got you in trouble in the first place.

13. Pay Attention to Credit Utilization

The credit utilization ratio is the proportion of revolving credit you use out of the total credit you have available. It accounts for 30% of your credit rating and is frequently the most neglected way to improve your score. Credit cards are just one type of revolving credit, and personal and home equity lines of credit are also included. You should never use more than 30% of your credit limit.

How Long Does It Take To Rebuild Your Credit?

It typically takes at least 3-6 months of good credit behavior to see a noticeable change in your credit score. Unless the adverse information on your credit report was a minor blip, like being late on bill payments one month, it is hard to make a change any faster than that. It’s safe to say that the less damaging information is on your credit report—bankruptcy, constant credit applications, maxed-out credit cards, and other negatives—the easier it will be to improve your credit rating.

Repairing a poor credit history is more time-consuming than developing a good one. Errors can hurt your credit history and prevent you from acquiring a loan. You may be denied an apartment, utilities, or lose out on a job if you have a poor credit score. While  some lenders do offer “bad credit loans,” the borrower frequently ends up incurring hundreds or thousands of dollars in higher interest rates.

Your credit score will be negatively impacted much more if you are habitually late with payments and have your account turned over to a collections firm. 

Damaging information will remain on your credit report for different amounts of time, depending on the issue: 

  • The repossession of your car will be a mark on your credit report for seven years. 
  • Chapter 13 bankruptcy is a mark for seven years while Chapter 7 bankruptcy stays for 10 years. 
  • Delinquent accounts stay in your report for seven years. 
  • Credit application inquiries last on your report for two years. 
  • Any public record items, e.g., property liens remain on your report for seven years. 

The effect on your credit score diminishes over time, so a Chapter 13 bankruptcy in year six has little impact when compared to its impact in year one.

How to Increase Your Credit Score Fast

Check Your Credit Report Carefully

Look for negative information on your credit report and have it removed. 

  • Ask for a free credit report from Experian, TransUnion, Equifax as they owe you one annually. One in every five reports contain errors and omissions that can make your score drop. Dispute any wrong information by providing documents that support your case. 
  • Write goodwill letters to creditors requesting them to get rid of negative entries if you’re having difficulties with them. They aren’t obliged to grant your request but they can give you a good deal especially if you’ve had a good history with them before. 
  • If you have any collections accounts on your report, look into “pay-to-delete” and have the scope of work in writing before you send them cash. The agency can remove your negative information after the settlement. 

Enroll in Experian Boost

If your low score is due to being new to credit-seeking and making timely payments for utilities and cell phones, ask your lender to pull a report from Experian using its “Experian Boost” program. This is a hybrid model referred to as “alternative credit data”—non-traditional payments that provide lenders with valuable information about an individual’s creditworthiness.

Game the FICO Scoring System

As we saw earlier, there are five categories that make up your credit score. Among them, only the credit utilization ratio can influence your score significantly in the short-term. It is important to make sure payments are made before the statement closing date, so that lower balances are reported to the FICO and the big three bureaus.

With other factors constant, consumers with credit scores in the upper 600s—the bottom of the “good” range—have utilization ratios of 40-50%. To get into the 700s, you must have a credit utilization percentage of less than 30%. If you wish to assist your score quickly, use less than 15% of your credit. The less you use, the better.

Having a fat savings account or a generous uncle (or both) makes this fix simple. Otherwise, you must find extra money in your budget (or extra income in your month), in addition to spending discipline, to reduce your balances.

A debt-consolidation loan may be one way to attack high balances. Banks and credit unions, as well as various peer-to-peer lenders, are willing to eliminate credit-card debt if you can afford it. You can get a lower interest rate than Visa while eliminating your debt at the same time.

The other way to reduce your credit utilization ratio is to ask for a credit limit increase from your current lenders. But the idea of asking for higher credit limits when you have problems managing the ones you have should make you sick to your stomach.

Become an Authorized User

Having an incredibly generous parent with excellent credit is an excellent way to boost your credit score. Ask if you can be added as an authorized user to their account to gain a longer credit history. It should also help your credit utilization (if the balance on the new account is low). Please avoid using the credit card that is sent to you, as it is strictly for credit enhancement.

Getting a Credit Score 

Having a positive credit history can benefit almost every aspect of your financial future, whether you want to purchase a car, rent or purchase a home, or seek a job. The easiest way to begin is to apply for a line of credit. Credit cards for gas stations or department stores are usually easy to obtain and are excellent methods to establish good credit. Using them responsibly and avoiding overcharging is crucial. Paying your bill on time each month is critical.

If you’re unable to get approved for a standard credit card, get a secured credit card instead. Secured credit cards require a deposit, which is often equal to the credit line. For instance, a $500 deposit gets you a $500 credit line. An secured card works the same as an unsecured card in that you receive a monthly statement and are expected to pay it. Make sure that spending on the secured card is reported to the credit bureaus.

Normally, as long as you pay each month, your deposit will be refunded when you are finished with the card. Your deposit cannot be used to make the monthly payments.

As we mentioned above, being an authorized user on a credit card can help build your credit history. The best position to be in when it comes to credit is to be an authorized credit card user. You can spend without worrying about paying, because someone else will pay for you, and your credit will improve as a result.

This way, you’ll have a credit card that can help you build your credit history, even as you wait to get one. You’ll get an increase in the number of years using credit, an increase in the average age of credit cards you use, and an increase in the credit utilization available on your cards. All three will be added to your credit report immediately. A 50-100 point boost to your credit score could be accomplished by these three elements alone.

Keep in mind that your credit score might be negatively affected if the cardholder misses payments, maxes out the card every month, or engages in any other negative behavior. Also, any negative activity you create can impact the cardholder’s credit score. If you max out the card and the cardholder is late with payments or cannot make them, it will be recorded as a negative on their account—and at some point, on yours as well.

You can also create a credit history by taking out a loan to buy a used car, if you have a job. Regular payments will establish your credit history positively.

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this. 

Credit Repair: The Ultimate Guide to Fixing Your Credit Yourself

The act of fixing your poor credit standing is referred to as credit repair. Your credit position can deteriorate due to a number of factors Repairing it can be as simple as making a call and disputing some mistaken information, or it can be labor intensive. That’s why it’s crucial to take some steps to have a good credit standing before everything falls apart. 

But if your credit score is already down the drain, don’t worry—there are ways to get it back on track. It can be labor-intensive and time-consuming to repair your credit yourself, which is why credit repair companies come in handy.  Credit repair services from these firms can assist you in disputing inaccurate information on your credit report with credit reporting agencies. 

These companies are transparent in what they do and they are professionals who understand how to raise your score again. Credit repair companies usually charge a monthly fee for work performed in the previous month or a flat fee for each item removed from your report. 

How to Repair Your Credit

Whether handling it on your own or working with a credit repair firm, to increase your credit score, you must take gradual steps to improve your credit history. There is no quick fix for your credit. Collection accounts, charge-offs, and missed payments will remain on your credit reports for seven to 10 years unless they are updated. However, you can build a more positive credit history by taking incremental steps over time.

1. Check Your Credit Report 

To learn more about your credit score and what lenders see when they look at yours, check your report and learn how to read it. There are companies that give you free credit score reports. With it, you’ll be able to see the highest risk factors that adversely affect your scores and make improvements to them. You can report incorrect information to a credit reporting agency if you find it. You should also contact the lender that reported the incorrect information and ask them to fix it.

2. Improve Your Payment History

FICO® score models are based on your financial history. The most significant component is your payment history. Late and missed payments will lower your credit scores, and bankruptcy and debt collection can cause significant damage. Your credit reports and scores will remain impacted for seven to 10 years after this negative information is recorded.

Your credit scores take into account the size of your debt and the time of your payments. Your score will be worse if your debts are large and your payments are late. Always make sure to pay your bills on time and keep them current to improve your credit scores.

3. Get Additional Credit Assistance

Consider consolidating your debt via a personal loan or balance transfer credit card if your debt is manageable.

If you can qualify and stick to the program terms, a debt consolidation loan might provide lower interest rates and reduced monthly payments. With a balance transfer card, you may be able to get an introductory 0% APR promotion, during which you can pay down the balance interest-free. Just be mindful not to continue charging on the original card once the balance is transferred.

Seeking the help of a reputable credit repair agency may be beneficial if your debt feels overwhelming and your credit isn’t good enough to get a balance transfer card or a low-interest personal loan. You can get a consultation with personalized advice for your situation.

You can also work with credit counselors to develop a debt management plan (DMP) for unsecured debt like credit cards. You’ll make your monthly payments to the credit counseling agency, and it will distribute the funds to your creditors. You might also be able to negotiate lower monthly payments and interest rates with the agency. If you use a DMP, your credit history will not be adversely affected as long as you continue to make payments on time as agreed to under the new terms.

4. Keep Tabs on Your Credit Utilization Ratio

Credit scoring models usually take into account your credit utilization ratio, or how much you owe compared to how much credit you have available overall. To find out your utilization percentage, multiply your revolving debt (such as your credit card balances) by 100 and then divide by your total credit (all of your credit limits). For example, if you have $6,000 in debt and $60,000 in credit across all of your accounts, your utilization percentage is 10%.

Keeping your credit utilization ratio below 30% is a good idea, but you should have a rule of thumb—the lower the ratio, the better. There are several ways to lower your credit utilization rate:

  • Pay off your account balances. 
  • Increase your available credit. You can do this by asking for a credit limit increase on your current card or opening a new credit card account. 
  • Take a personal loan to consolidate your credit card debt as it’s not included in the calculation of the credit utilization rate. 

Increasing your credit limit might look like a great option, but it could end up costing you more money. Trying to open a new credit card might tempt you to spend more, which might take you deeper into debt. In addition, if you apply for a new credit card, a creditor’s hard inquiry might temporarily reduce your credit score by a few points.

Getting a personal loan to consolidate your debt can result in a zero utilization rate immediately, but obtaining an acceptable interest rate can be tough if your credit score is poor. As it is, paying down your balances might be the most effective method to boost your credit utilization rate and, consequently, your credit scores.

5. Check the Number of Credit Accounts You Have

Your score takes into account how much you owe across the many accounts you own, and what proportion of those accounts are involved in your debt. It might be advantageous to pay down some of your accounts if you can.

Closing an account that you’ve paid down to zero may adversely impact your credit score, as well as your credit utilization ratio. So keep your accounts open even after the balance is down to zero. Keeping paid-off accounts open is a plus, as those accounts are in good standing. 

6. Keep Your Credit History In Mind

Credit score modeling methods, like those used by FICO, take into account an individual’s oldest account and provide individuals with longer credit histories with a monetary advantage. Before closing a credit card account, think about your credit history. Even if you’ve paid off a credit card and don’t intend to use it, leaving it open might be a good call.

Your personal financial circumstances are unique, so you should carefully assess your situation to determine the best approach. Of course, if keeping accounts open and maintaining credit availability would lead to further spending and debt, you may choose to close them. Every individual has a different financial situation, and only you know all the details.

7. Beware of New Credit

Opening several credit accounts in a short period of time can cause lenders to perceive you as higher risk and, as a result, negatively impact your credit scores. Before signing up for a loan or opening a new credit card account, consider the consequences.

However, it’s important to understand that when looking for the best mortgage rates or buying a car, your inquiries may be aggregated and counted as one inquiry for the purposes of credit scoring. In many popular scoring procedures, recent inquiries have a greater impact than older inquiries, and they are shown on your credit report for just 24 months.

8. Once You’ve Reached Your Goal, Keep Track of Your Credit Ratings

Because you have already done the necessary work to rebuild your credit history, you might be tempted to move on and focus on something else. But it’s still a good idea to keep an eye on your credit score. Keeping tabs on your credit score can alert you to any potential problems that could make it drop again. It will also give you a heads-up if someone commits identity theft, so you can take action before it gets out of hand.

How Long Does It Take to Rebuild Credit?

It’s difficult to estimate how long it takes for someone to build back their credit score because each individual’s credit history is unique. The negative information in your credit report might influence how long it takes for you to recover, especially if it occurred a long time ago. You can speed up the process of paying down the debt, but other actions might take months to have a significant impact.

It can take up to 30 days for an investigation into your credit report to finish if you believe the information is fraudulent or inaccurate. When the credit reporting agency discovers your dispute is valid, the information will be removed from your credit report and your score will reflect the change as soon as it is calculated again.

Don’t sweat if your credit report isn’t updated right away if you’re making payments or reducing your credit card balances. It’s critical that you check your credit score regularly to keep track of your progress and make sure the right information is being reported over time. As your credit history improves, your credit scores are likely to improve, and you’ll have a better chance of qualifying for favorable credit terms when you need to borrow again.

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this. 

10 Steps to Repair Bad Credit

You might be experiencing bad credit if you’ve got an overdue student loan, a high credit card balance, a lot of overdue collections accounts, or even have been foreclosed on. Lack of good credit is a barrier to many of life’s most important milestones. You may be denied a credit card or even forced to seek assistance for an auto loan or mortgage, and the interest rates offered to you may be substantially higher.

Thankfully, a credit repair company can help you get your credit back on track. They will help you negotiate settlements with creditors, remove inaccurate information, contact collection agencies, prepare letters to credit bureaus, offer advice and support to repair your credit, and update your account. They work with credit reporting agencies on your behalf and ensure that positive changes are reflected on your credit reports. 

They are experts in credit law and well-versed in consumer protection laws and statutes such as the Fair Credit Reporting Act (FCRA), the Fair Debt Collections Practices Act (FDCPA), or the Fair Credit Billing Act (FCBA). 

Keep in mind that bad credit doesn’t have to be a permanent scar on your record. Instead, it can be a life lesson, allowing you to correct your mistakes. If you’re not interested in using a credit repair firm, you can also greatly improve your credit score on your own if you simply have the know-how, the patience, and the determination to stick to your budget. 

Here are 10 techniques for dealing with your bad credit.

1. Check Your Credit Score and Credit Reports Regularly.

To begin do-it-yourself credit repair, you must get copies of your full credit report from all three credit bureaus: TransUnion, Equifax, and Experian. Credit reports and scores are two separate (but interconnected) things.

Credit Score

Your credit score is used by many lenders to determine how much of a credit risk you are. The higher the number, the less risky you are as a borrower and the more favorable of a loan you can receive. Someone with a high credit score may be able to borrow more money and receive a lower interest rate. Your credit score is used to determine your ability to make payments and your eligibility for loans.

There are five factors that comprise your credit score, and they are weighed in different proportions when calculating the final number:

  • Payment history (35%): Always pay your loan on time for a pristine history. 
  • Credit utilization ratio (30%): Huge balances on your credit cards will hurt your score. 
  • New credit accounts (10%): You get a hard credit inquiry whenever you apply for a loan or new credit card. This lowers your score temporarily. 
  • Credit account mix(10%): Having various loan types (e.g. mortgages, auto loans, credit loans, etc.) helps you have optimal credit. 
  • Length of your credit history (15%): The longer your credit accounts have been open, the better your credit score. The longer you maintain a good credit history, the better your score.

Having a credit score above 700 lets you do pretty much anything a person with a higher score can do. Actually, if you have a higher credit score, let’s say 850,  lenders know that they are unlikely to make much money from you, so it can work against you. 

Credit Report

Your credit report shows your credit history in detail. You can check if you’ve made any loan payments late or if you’ve had any late payments in the past. It’s important to check your credit report every now and then to ensure that there isn’t an error on your account. 

You can check your credit score and credit report for free through reputable free credit score tracking apps such as Credit Karma or Credit Sesame. 

2. Dispute Any Errors You Find

The next step in credit repair is to dispute incorrect information on your credit report. While errors aren’t common, they do occur. It’s worth cleaning up any small errors you do see, but don’t try to correct accurate information.

You should also check your identity information (including your Social Security number, the spelling of your name, and address) and credit history to see if there are any problems with your credit.

Make a copy of the report and highlight the errors if you notice any on the list of credit cards, outstanding debts, or major purchases. Make copies of your bank statements next, because the credit bureaus won’t act without proof.

In the letter, notify the credit reporting agency about the error and provide a copy of the report. Share how the report is incorrect and include enough evidence to support the claim. Sending this letter by certified mail is a good idea even though some Credit Bureaus now allow you to submit disputes online.

You must send a letter to the reporting agency asking for a response within 30 days. You can always get the help of a credit repair company to straighten things out for you. 

3. Stick to a Budget and Don’t Go Beyond It

Make sure you’re not spending more than you earn, no matter how painful or scary it may be. You need a budget. This may be extra difficult (though maybe even more necessary) for people who don’t get a consistent income throughout the year. For example, if you’re a restaurant server, an Uber driver, or a freelance writer, your income may vary from month to month, so you will need to budget extra.

Review your tax returns for the past two years to get a sense of how much money you take home in a year. Subtract your regular monthly expenses from your current income to get your starting point. Next, estimate your monthly spending habits for other expenses such as gasoline, groceries, and entertainment. Create a limit, based on your income, of what you can spend in each of the different categories of expenses. Resist impulse purchases.

4. Pay Your Bills on Time

Make sure you pay all your bills on time. Missing a payment accounts for 35% of your credit score. That’s heavier than any other factor. Missing a single payment on a credit card can knock down your credit score significantly. To improve your credit score, paying your bills on time is the most important thing you can do. Even if you are only paying the minimum, your credit score will improve. 

To prevent damaging your credit score,  make as many bills as possible autopay. Even if you normally pay your bills on time, autopay is still a good safety net if you somehow forget.

Some bills might not be eligible for autopay. Make yourself a number of reminders if you fear you will forget about these. For example, you can set a mobile notification a week before the due date asking yourself to pay early—and another late notification on the due date. If you’re really concerned, put sticky notes on your bathroom mirror reminding you to pay. It is critical.

5. Pay Off/Down Credit Card Balances and Other Debts

Avoid being charged high-interest rates by paying off your credit card in full before each due date. You may not always be able to do that, but you must develop a plan to clear your debt across multiple accounts. It is not bad to focus on the debts that cost the most to pay before tackling debts that cost the least.

When you’re making no progress at all on your five credit cards draining away your bank account in the form of minimum payments and interest charges, it can feel like you’ve got nothing to show for your efforts. Prioritize paying down the smallest loan until it’s finished, then you can focus on the next smallest loan. Your debt decreasing can also help your mental state.

6. Keep Track of Your Credit Utilization Ratio.

Using more than 30% of your total credit is a bad idea. Credit utilization accounts for 30% of your credit score. In short, 30% of your credit score is based on the amount of credit you are using vis-à-vis the amount of credit that you have available to you. Consider the following example: You have a $10,000 credit line on one credit card and a $5,000 outstanding balance. In this situation, your credit utilization is 50%.

A good credit utilization ratio is 30% or less. If a lender sees you using 90% of your available credit, it may indicate financial trouble. Try to pay off as many of your large purchases as possible to prevent exceeding the 30% credit utilization threshold.

7. Don’t Close Your Old Credit Cards

Even if you don’t use a credit card, it may still be worth keeping an account. Your credit score is determined by the proportion of your debts that are currently outstanding. This is known as your credit score’s “importance factor.” The longer the average age of your debts, the better your credit rating.

For instance, if you opened your first credit card four years ago, the average length of your credit history is four years. If you open another credit card today, the average length of your credit history will be two years. And if you want to close your first card, the average length of your credit history will be one day. The accounts that you close in good standing will remain on your credit report for several years, but the impact on your credit score when the account is removed will be felt. 

Don’t just close your credit card if it no longer suits your lifestyle. Keeping it open will help preserve the average age of your loans. It’s smart to keep a credit card around if you don’t have to pay an annual fee. However, if you don’t use your card, it’s probably not a good idea. You can call your bank to switch to a no-annual-fee version of the card.

8. Ask for Help

You can get the help of a professional credit repair company to improve your credit score. Inaccurate data, blemishes, and reporting mistakes can all have a negative effect on your credit score. Also, late payments, collections accounts and charge-offs can have the same dramatic effect. A poor credit score not only affects your ability to get a loan but also get employment in some cases. A credit repair company comes in to help you get everything on track. They are skilled negotiators, who know all credit laws and can offer you ongoing support and advice.

If you must, lean on those with better credit. It still is possible for you to achieve some of the greatest milestones in life even if your credit score is holding you back. Ask family members to assist you in improving your score if you need help buying a house or car.

An authorized user card is one way to get your own good credit history on someone else’s credit report. It’s an injection of healthy credit habits into your credit score. They don’t even have to give you the authorized user card, they can just shred it and allow you to reap the benefits of their good behavior secondhand.

You may want to consider asking a relative with good credit to cosign with you if you want to get a new loan. For instance, if you want to apply for a debt-consolidation loan but are not qualified, a cosigner can help you out. In this case, if you default on the loan, the family member will be responsible for the bill.

9. Do Not Apply for New Credit Cards

Even if you were offered a sign-up bonus for a new credit card, resist the temptation to open one. Each time you ask for a new loan, the lender will scrutinize your credit to determine if you’re worthy. This is known as a “credit check.”

There are two kinds of credit checks: soft and hard credit pulls. A soft credit pull has no adverse effect on your credit score, as it’s used to pre-approve loans for any potential customers. Hard credit pulls, on the other hand, can lower your credit score temporarily. Lenders use this to decide whether they can extend the loan to you. 

Credit scores are likely to plummet dramatically if you apply for new credit too frequently, although you might see a rebound within a month or two. Frequent credit inquiries are viewed as a warning sign by lenders. They don’t want to see lots of inquiries because it can reflect that you are desperate for money.

10. Use Credit-Building Tools

To get back on track, use available credit tools to help you. There are unique ways to build your credit on the internet. You can get apps that help you build credit by offering various types of loans—each of which you pay down monthly. You’ll find some that even send you back the initial term of the loan, minus the interest rate and a small application fee, at the end of the term. 

When you make a payment each month, good behavior is reported to the Credit Bureau and your credit score and profile may improve. The initial application might lower your credit score, but if you make all payments on time (essentially to yourself), it will increase.

You can also improve your credit by obtaining a secured credit card from a bank. These cards are issued to people with poor credit because they are effectively zero risk for them. To put it simply, you hand over money to the bank and they give you a credit card with a matching credit limit. For instance, if you give the bank $2,000, you’ll receive a credit card with a $2,000 limit. Should you neglect to repay your debts, the bank will keep your money. When you graduate from a secured credit card, the bank will return your money.

Wrapping Up!

It takes tremendous willpower to climb out of debt, but you can do it. Make sure there aren’t any errors on your credit report and dispute them with the credit bureaus. Even if it’s just the minimum payment, make sure you pay all your bills on time. Starting with the smallest credit card balance, focus on eliminating credit card debt as quickly as possible. Keep your credit utilization low, and keep all your credit cards open and in a sock drawer, if you must, to remove temptation (as long as they don’t have annual fees).

There really is no quick credit fix. However, if you plan to take on a big debt or buy a new home, it’s worth the effort. You’ve also got credit repair companies like High Score Now to help you out.

Thank you for reading our article. We hope you learned new ways to battle creditors and banks while protecting yourself.

We would encourage you to become a member of HigherScoreNow.com and start to leverage all the benefits of having good credit. You deserve this.