When was the last time you checked your credit score? If you’ve missed bill payments or amassed a lot of debt, your credit score could be a liability. And the last thing you want is a score that keeps you from getting a lease agreement or loan.
Fortunately, you can put your score on a better path. Stick around to learn how to fix a bad credit score in 5 simple ways!
1. Contest Credit Score Errors
Wondering how to raise a credit score? Your first step should be to access it from one of the three reporting companies. You can get a free copy once a year.
Check it for any suspicious or unwarranted charges. Confirm that any outstanding debts still exist. For instance, if you finished paying off student loans last year, you shouldn’t see them listed.
If you do dispute anything, you’ll need evidence in the form of a bank statement or relevant documents. Contact the credit reporting agency from which you received the report to file a complaint.
2. Consider Debt Consolidation
Another way to tackle a bad credit score is through loan consolidation. You can lump all high-interest credit card loans into one loan to make payments more manageable. Look into cancelling debt review meetings, too, to repair your record.
What is a good credit score? Aim to keep it at 670 or above. You can expect to see it updated monthly.
3. Automate Your Bill Payments
Struggling to pay bills? You’ll need to outline a budget and hold yourself accountable to it. Determine how much income you have and ensure that your monthly expenses don’t exceed it.
Automate bill payments so you won’t need to worry about missing due dates. When you’re in the process of raising a credit score, create alerts to check your account balances.
4. Don’t Close Credit Cards
While it might sound logical to reduce your credit cards or bank accounts, don’t do it. You’re better off keeping them going and keeping the balances low.
Keeping credit cards open means that your credit utilization ratio won’t go up. In other words, you’ll have available credit. But by not using it, you’ll improve your credit score.
5. Stay Away From Hard Inquiries
Soft inquiries include instances where you check your credit score. These also can include times when you might be shopping for a mortgage to get a new home. Or you could be looking at car loan options.
Hard inquiries, by contrast, occur when a potential lender assesses you for a loan application or other financial connection. In these scenarios, the information will become part of your credit report. Hard inquiries can reflect poorly if you’re trying to open several credit cards, for instance.
Learn How to Fix a Bad Credit Score
Knowing how to fix a bad credit score requires paying attention to your finances and being proactive. You’ll want to refute any errors and avoid making hard inquiries. Get your financial ducks in a row, too, by paying off debts and bills.
For more financial tips, check back for the latest articles.