Fixing your credit is possible if you are determined is important if you want to achieve financial stability or freedom. You can fix your credit by getting a charge off removal and monitoring all your transactions your finances by limiting your spending. Regularly reviewing your credit report to check any errors, paying debts, paying bills on time can also help you with fixing your credit. Here are some tips on fixing credit:
Pay Outstanding Balances
Paying down balances will increase your credit score and also decrease your interest. It should be part of your long-term financial plan if you can’t pay the balances instantly. Talk to your lenders and agree to pay every month.
Credit bureaus analyze your debt as a ratio, which is calculated by adding all your credit card balances and dividing your credit limit. A low credit utilization ratio of less than 30% will show lenders you are likely to manage credit well.
Pay Bills on Time
Lenders will first review the reports to check how reliably you pay your bills. Your past payment performance will predict your future performance. Make sure you pay your bills on time as agreed. Late payments or paying less than what you agreed will affect your credit scores for close to 7 years.
Use reminders or automatic payment to ensure you pay on time every month. It is easier to remember bills such as rent and phone bills than to remember student loans and other loans. If you are behind on payments, work hard to ensure you are current as soon as possible.
Dispute Inaccuracies in Your Report
Go through your credit report, if you see any errors dispute the information and get it corrected immediately. Errors in your credit reports can drag your scores down. Don’t forget to verify the accounts listed to ensure they are correct.
By monitoring your credit, you will detect any identity fraud that will mess your scores. You also get alerts and notifications if your account balance changes. If you see any errors or mistakes, highlight the error and make a copy of the report.
Get copies that will help you back up your claim such as receipts, bank statements. You need to contact the credit bureau in whose report you found the error, either by mail, online, or by calling. They have 30 days or less to review the report and get back to you. If the error is valid, the incorrect information will be corrected or deleted.
Don’t Get a New Credit
Do not be tempted to get a new credit card even if you are offered a discount. Apply for new credit it is listed in your report as ‘hard inquiry’, having many within two years will affect your credit scores. The inquiries will delay your goal of increasing your credit score.