If you’ve ever had credit trouble you know that there is no overnight fix to bad credit. There are, however, a number of steps you can take to insure you improve you credit over time.
Steps to Improve Your Credit
Of course everyone would love to have a perfect credit score but sometimes finances can get the best of us. Maybe you lost your job and were forced to miss payments or maybe you made a purchase you couldn’t really afford. Whatever the case may be, here are three steps to improve your credit:
- Pay Bills On Time – On-time payments are extremely important to credit agencies. If you pay your bills on time consecutively for six months you will see an improvement on your credit score.
- Pay Off Debt – In addition to paying your bills on time paying off your current debt is extremely important. If you have debt you should try to pay it off as quickly as possible (in full when you can).
- Keep Balances Low – If you’re paying your bills on time and paying off your debt you should also be able to keep the balances on your account low. This will also help your credit score greatly.
Other Tips if You Have Bad Credit
Following the above three steps is a great start if you’re trying to improve your credit score but there are other things you should know about if you have bad credit. Most of these tips can help improve your credit score without you needing to do anything.
- Only apply for a new credit account when necessary. Making too many inquiries on your credit can lead to a bad credit score. So, if you’re trying to improve your credit score you should try to refrain from applying for new credit.
- If you can’t get any more credit, but need financial help right away, there are other options that can help. You can ask family or friends for help, ask for donations online, or get an advance on your tax return with income tax loans.
- Leave unused credit accounts open if you can. Some people don’t have the self-discipline for this but if you can leave unused credit accounts open you will increase your credit score. Part of your score is based on the amount of credit you have available.
- Check your credit report often and dispute anything you see that doesn’t seem right. Oftentimes we pay things off or (in extreme cases) your identity may have been stolen. You should be sure to stay on top of your credit score.
How to Rebuild Your Credit
You now have some of the tips necessary to improving your credit score but how do you rebuild credit?
The best answer to that question is to give it time. Many delinquencies and other marks on your credit report will take time to fall off. Most delinquencies remain for seven years, bankruptcies for 10 and inquiries remain on your report for two years. You will have to wait for many of these things to be taken off your report before it is improved but once they do your finances will thank you!
Have you significantly improved your credit score? We’d love to hear your story.