5 Tips for Taking Control of Your Credit Score and Repairing Damaged Credit
Having a low credit score can have a huge impact on your financial life, causing everything from higher insurance premiums to decreased reliability when applying for loans. Thankfully, it isn’t a permanent condition – there are steps you can take to repair your credit and even raise your credit score. Here are five easy tips to help you take control and repair your damaged credit.
1. Get a Copy of Your Credit Report
The best way to start taking control of your credit is to get a copy of your credit report. You are entitled to one free copy a year from each of the three major credit reporting agencies, so make sure to take advantage. Check for any inaccuracies that may be dragging down your credit score and dispute any errors. This can be done online or by sending a written request to the bureaus.
2. Set Up Automatic Payments
One of the best ways to make sure you never miss a payment is to set up automatic payments for your bills. That way, you can guarantee that the payment will always be made on time and you won’t suffer any negative marks on your credit. This functions as a kind of insurance – even if you are too busy or forget to make the payments, you will have the assurance that your bills will be taken care of.
3. Focus on Paid-In-Full Accounts
Your credit report contains information about the accounts you maintain, as well as your payment history. Any accounts with no outstanding balances are usually considered to be a positive factor in your credit score. So if you have any accounts that you have paid off completely, be sure to highlight them in your report. This will help to improve your credit score and give creditors an indication of your own reliability.
4. Reduce Your Credit Utilization Ratio
Your credit utilization ratio is the amount of your credit line that you are currently using. A low credit utilization ratio indicates to creditors that you are financially responsible, as you are not utilizing your full available credit. To reduce your utilization ratio, try paying down your credit card balances or asking for an increase in your credit line.
5. Establish a Positive Payment History
Finally, one of the most important aspects of repairing your damaged credit is to establish a positive payment history. This means making all payments on time and in full each month. It also means avoiding late fees or high overdraft fees. Taking these steps will help to show creditors that you are committed to responsible money management, and this will go a long way towards restoring your damaged credit.
By following these five tips, you will be on your way to taking control of your credit score and repairing any damage that may have been done. Be sure to check your credit report regularly to ensure accuracy and monitor your progress. With a few simple steps, you can have a better credit score in no time.
