Whether you have bad credit or just want to improve your score, it’s important to know what steps to take. You should regularly look at your credit reports, paying bills on time and examining whether you need to open new credit fixing accounts. You also need to be aware that repairing credit is a long process and you will see results only after some time. You can also take several short-term actions that will help you get closer to having a good credit score, such as disputing inaccurate information and making sure your credit card balances are low.
You should first pull your credit reports from each of the three major credit bureaus (Equifax, TransUnion and Experian) to make sure there are no errors. If there are, the Fair Credit Reporting Act allows you to submit a dispute with each credit bureau and have them investigate your claim. If the credit bureau can’t verify the accuracy of the information, it must remove it from your report. You can also check your credit score for free on Credit Karma and if you find inaccurate information you can dispute it directly through the platform.
The next step to take is reducing your outstanding balances. The amount of debt you have can make up to 30% of your credit score, so this is a crucial step in fixing your credit. You should focus on lowering your credit card and loan balances as much as possible by paying down the principal. Paying down your debt also has the added benefit of lowering your interest rate and reducing the amount you’ll be paying in fees each month.
You can also consider reducing your credit utilization by putting a cap on how much you’re spending with your cards each month. This will help you keep your credit utilization below 30%, which is another major factor in your credit score. It’s also a good idea to put your credit cards on autopay, and set reminders for yourself to log in and make payments each month.
If you’ve already worked to reduce your balances and have corrected any errors on your credit reports, it’s important to keep monitoring your report. You should regularly download a copy of your credit report from each of the credit bureaus and compare them for any new errors or disputed items. Also, you should check in with the credit repair company you hired or a non-profit credit counseling agency that may be helping you with your credit.
Generally speaking, credit repair companies can help you get incorrect negative marks removed from your credit report and they can also advise you on how to best manage your money in the future. However, there are many scammers out there who promise to raise your credit score for a fee. It’s important to research the companies you’re considering before hiring one and never give a credit repair service any money upfront. You should be able to find reviews of these companies online or from trusted sources.