Your credit score is one of the most important factors in your financial life, so if you’re trying to get it back in shape, you’re already on the right track. Credit repair services can be daunting, but these seven tips will help you start making big changes today and keep you moving forward as you improve your financial situation over time.
1. Get your Free Credit Report
To learn more about your credit score and how it impacts your future, you need to order a free copy of your credit report from each of the three major credit bureaus. Each agency has its own web site and provides information about how to request your report online, by mail or by phone. The reports will list any late payments on loans, as well as other accounts that you may have opened in years past. From there, if you discover mistakes or errors that can be corrected easily (e.g., a typo in an account number), try contacting those businesses directly to fix any issues on record. Sometimes it’s easier than expected.
2. See What Your Score is
A good credit score means lower interest rates and higher credit limits. If you want to keep your credit history in check, then it’s critical that you know what your score is and how it’s calculated. One way to do that is by seeing what your score is. Credit scores are usually available online, free of charge, within a few days of requesting them from one or more of the three major reporting agencies: Equifax, Experian and TransUnion. There is no perfect credit score – just as there’s no such thing as a perfect SAT score – but you can increase your chances of having a higher one by paying off debt on time and keeping balances low relative to credit limits.
Take 10 minutes today to pull up your report on each agency’s website. Your goal should be to have all three reports containing updated information that accurately reflects how well you manage debt payments, transactions and inquiries going forward. A change in even one line item could have an impact on future loans, so take steps now if any problems arise.
3. Request a Credit Limit Increase
If you have a solid track record of paying your bills on time, it’s probably time to ask for a raise.
You can request an increase directly from your credit card issuer by following these simple steps:
1) Get out your card’s most recent statement.
2) Compare that statement to your budget—if there are no surprises, make sure you can afford an increased limit before proceeding.
3) Call or write to explain why you think you deserve more credit.
4) Request another credit line. Be polite and respectful; don’t just throw out a random number. Instead, say something like I’ve averaged 20% growth each month for five consecutive months now.
5) Follow up if necessary—and keep good records! It might take several tries to get approved, so be persistent without being annoying. Remember too that all credit card issuers will make their own decision about whether or not they agree with your proposal (see Step 4).
4. Look at All Accounts Before Closing Old Ones
When you’re working to repair your credit, it’s important to look at all of your accounts. You may have a bad payment history on a credit card, but a good history on your auto loan. Taking a close look at everything gives you a full picture of what’s going on with your credit situation and can help you make wise decisions. This is called being credit-wise and it can be incredibly helpful when trying to figure out how to repair your credit. If one account is hurting your score, then maybe closing that account isn’t such a great idea.
5. Consolidate Debts if Possible
If you have more than one credit card, you might want to consider consolidating your debts onto a single card with a lower interest rate. In addition to saving money on interest payments, carrying multiple balances at higher rates can do serious damage to your credit score. Having one credit card balance is also easier to track and manage. If you need help consolidating your debt or figuring out what’s best for your individual situation, contact a reputable bankruptcy attorney near you today. Credit repair is always better when it’s done by experts!
6. If you have Collections, Dispute Them Now!
You can’t fix your credit until you start getting an accurate picture of what’s wrong with it. If you have collection accounts, dispute them now and make sure they’re removed from your credit report as soon as possible. (You may need to hire a professional to do so, but it will be worth it.) Collection accounts drag down your credit score and must be disputed within 60 days of when they first showed up on your report or by 7 years after being charged off, whichever is sooner. Some collection agencies are dishonest—they sell bad debt repeatedly, making errors on your credit report along the way.
7. Use Debit Instead of Credit Cards
If you’re looking to start repairing your credit, look no further than your debit card. Debit cards allow you to spend money directly from your bank account, so using them instead of credit cards will help you build good financial habits that can pay off big time when it comes time to apply for a loan or credit card. Making sure you always have cash on hand also helps reduce spending and creates more incentive to avoid unnecessary purchases.
Another advantage of debit cards? It’s much easier to keep track of all your transactions with them than it is with a slew of different charge accounts. And finally, since debit cards require your signature or fingerprint for each purchase, you’ll feel more secure carrying one with you. This may make it easier to resist impulse buys! After all—who wants their identity stolen? Nobody! All in all, putting a little thought into how and where you use credit is a simple yet effective way to get started with credit repair services.
Use these tips as a jumping-off point and watch as they grow into a satisfying new way of life! Good luck!