You’re likely reading this article because of the catchy title. You have bad credit and you want to learn how to improve it fast.
Unfortunately I have some bad news for you; In most cases it’s not feasible for you to improve your credit overnight but all hope is not lost. Here are some simple things that you can do to start improving your credit right away.
1. Check your credit report. There are many website where you can check your credit online, either free or paid. There are 3 major credit reporting agencies in the U.S – Equifax, Experian and Transunion and in Canada, Equifax and Transunion are the best. Look for errors on your credit report that may be hindering your credit score. You may have old debts that are showing as still owing, when in fact you have paid them in full. Simply contact the creditor and ask them to update your credit bureau with the latest information. If there are errors, this can increase your credit score very quickly, especially if it’s an old debt that shows as unpaid when it’s actually been paid in full.
2. Keep your credit card balances low. While it may not be feasible to pay the full balance off each month, keep the balance at 25% or less of the available credit. For example, if your credit card has a $5000 limit, try not to owe more than $1250 at any one time on it. This will show creditors that you are responsible with your credit. If your credit card is maxed out right now, work at getting the balance paid down and do not charge more than you can afford to pay off quickly.
3. Pay your bills on time each month. This seems obvious, but for some people who are not very organized, paying bills on time each month is critical. Some bills may not report late payments, but others will report if you are even a day late. In my experience, store credit cards are the ones that may report poor payment history, even if it’s just a few days. If you’re short on cash, make sure to pay at least the minimum payment.
4. Don’t close your old credit accounts. A good portion of your credit score is made up of your history. You may have a credit card that you aren’t using and have had for years. Even if you don’t think you need it, keep it and use it occasionly as this will help your credit score dramatically.
These are just a few things that you can do to improve your credit score and ensure that you get a low rate on a car loan or mortgage when you apply next time. A good credit score can save you thousands of dollars per year in interest costs, so it’s worth your while to work at improving your score.
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Author: Blake Hygate
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