Your credit score is 621. Not quite subprime, but definitely not in a very good category or at a place where you’ll get a great rate on a new car, a house or something else you want to buy. That may also mean finding it difficult to borrow money at all. Fortunately, there are a number of ways for you to improve your credit. Smart ways, at that.
1. Obtain your credit reports. Your credit score is based on your credit history and that information can be found in your credit reports. Three credit reporting bureaus maintain files on you and these are: TransUnion, Equifax and Experian. By law, each company must provide one free copy of your credit report annually on demand. The AnnualCreditReport.com website is the only place authorized to provide them to you at no cost to you. Visit this site and obtain one, two or all three of reports.
2. Read your credit reports. Don’t simply download or print out your credit reports without studying them closely. Each report has pertinent information about you, including your legal name, your current and former addresses, your current and former employers, and other important information. The reports will also list your creditors, including companies you have done business with in the past and those with whom you are still doing business with today. You should verify that the information about you is correct and current. If there is an account associated with you that doesn’t belong to you, then notify the respective credit reporting bureau. Mistakes and outdated information are typically fixed within 30 to 60 days. You should receive notification from the credit bureau of the correction as well as an updated copy of your credit report.
3. Don’t close your credit accounts. You may be tempted to close some credit accounts in a bid to fix your credit. This is a mistake. Leave those accounts open, otherwise you risk having your score lowered. Yes, this sounds counterintuitive, but this is the way that the credit industry operates. You’re on their playing field, so play the way they want you to.
4. Pay your bills on time. One sure way you’ll aggravate your creditors is to fall behind on your payments. This information is then reported to the credit bureaus and your credit score will suffer accordingly. It would be better for you to make payments on time and to catch up on your other behind payments. Once you are up to date on what you owe, then your credit score should rise.
5. Pay down your debt. Quite frankly, the more debt you have, the worse your credit score. It is best to pay down your debt and relieve yourself of that burden. Too much debt will lower your score. Tackling your debt by paying off one debt at a time will make it easier for you to control what you owe explains InstaLoan.com.
6. Fix your credit. There are times when consumers need outside help to repair their credit. You may have been working with your creditors, but are still struggling to manage your debt. Here, you may need to speak with a credit counselor in order to get the assistance you need. But be careful as not all counselors are the same. Deal only with a licensed professional, ask for and check references, and understand the fee structure before committing to any service.
Credit trouble can take months, even years to repair. The path to smarter credit can usually be measure in small steps instead of by leaps and by bounds. Do not grow discouraged here — your bad credit can become good credit, giving you the peace you need and the control you crave.