Good credit plays a vital
part in getting the money you need to make major purchases, such as buying new
or a car. But if you have a bad credit then it is no less than a nightmare as
it stops you makes any transaction.
Unfortunately, for many
Americans, their past trouble in paying off debt or mistakes by credit
reporting agencies can lead to lower credit scores, which ultimately limits
your ability to secure credit.
If you are one of the
millions of Americans who have negative events on their credit reports, one
option to improve your credit score is to work with credit repair services. Or
understanding why you were not approved and following these three tips for
rebuilding your credit might work:
Identify Things that are Hurting Your Score
When rebuilding your
credit, there are five components that could impact your credit score. They
are- payment history, credit utilization ratio, and age of credit accounts,
credit accounts mix and your history of applying for credit.
The most important factor
is your payment history as it accounts for 35% of your score. If you’ve applied
for your credit reports a lot recently this may be negatively affecting your
score. While there’s nothing you can do about this, although they will stop
hurting your credit score as they grow older.
Fix Your Reports
When you analyze your
credit reports you may find mistakes. According to a report, about 20% of us
have errors in at least one of our three credit reports that are affecting our
credit scores. If you find mistakes in yours
- You must dispute each mistake with each credit reporting bureau.
- You can’t dispute multiple errors on one credit report with just a single letter. However, if one account has multiple errors you can put them into one dispute.
- You don’t need to do this alone. You can take help from a credit repair services or credit repair expert that specializes in this type of case.
Start a Good Credit History
Even though you may have
been turned down for one kind of credit this doesn’t mean that you can’t get
other types. Opening new credit can help fix your credit quicker if your credit
utilization ratio or account mix is hurting your score.
In fact, there are credit
cards designed specifically for people who have bad credit but would like to
fix it. They are called secured credit cards as they require a deposit. Once
you use up that deposit you will need to add more money to your account or stop
using the card.
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