Sometimes it feels like a bad credit score is the end of the world. You want to buy a house or a car, start or grow a business, or just go on a nice vacation or buy your spouse or kid’s a nice gift. You feel stuck. This site is chock full of great resources, advice and lenders that can help you when your credit is bad or poor, but I want to talk about how you can move forward and improve your credit score.
A new loan is actually a good start as long as you make your payments on time. The lenders will report your timely payments to the credit bureaus and that will prove you are able to get a loan and pay it off. Your score will go up.
The 3 Things You Can Do to Increase Your Credit Score
First and foremost get a credit report, preferably from all three bureaus, Equifax, Experian and TransUnion. Review the report carefully and formally dispute all the inaccurate information. In December of 2012, the Federal Trade Commission reported to Congress that in a study they did 26% of the 1001 participants had at least one error on at least one of their three credit reports. So there is a good chance something is being reported wrong on yours. Dispute it and get the inaccurate information removed.
Use Less then 30% of your Available Credit
Secondly, you need to try and utilize 30% or less of the credit you do have. If you have a credit card with a limit of $1000 try to pay it down to at least $300 each month. And if you have credit accounts you don’t need don’t close them but leave them open but don’t use them. This shows the credit bureaus you have credit you don’t need.
Also, there are plenty of credit cards available for consumers trying to rebuild their credit. Some are secured, which means you make a deposit against what you will use the card for, but it improves your credit because you have been extended credit. There are also unsecured credit cards that will charge you a bit more interest. If you pay them off each month, you will not have to pay that interest.
Pay Your Bills on Time
And finally, do your best to pay your bills on time. Now we all go through bad times and sometimes that can affect our ability to pay our debts. Obviously, this affects our credit score, so try your best to make all your payments on time. This will improve your score and ensure that next time it will be much easier to find a personal, business, or school loan at the best available rates.
Act Now and Position Yourself for the Future
Remember don’t beat yourself up for your bad credit. Utilize the resources we have here by applying now for your bad credit loan, but at the same time make use of this advice to put yourself in a better borrowing situation for the future.