Doing much of anything requires that you have pretty decent credit. There are ways for you to obtain a house and even a vehicle with fair or poor credit. However, it usually requires more money than you may have on hand. To avoid this, you should honestly start to repair your credit now. Don’t wait.
I get that this can be easier said than done, but it is something that must be done. Let’s take a look at some tips you can use to repair your credit.
Repair Your Credit: 6 Tips on How to Raise Your Credit Score
It is important to start using your credit wisely as early as you can. If you were not able to do that early on, you can still work on repairing your credit. Below are some tips you can use to repair your credit.
1) Review Your Credit Reports
Before you can start to repair your credit, you should know where you stand with the three major credit bureaus:
This could help you see what areas need the most work, as well as view your credit scores. Check for any inaccuracies or negative marks that may appear. It happens more often than you think and may even be the reason for your poor credit rating.
(Also, I’ve used CreditKarma for years too. It’s worked great, it’s totally free, and doesn’t ding your credit at all!)
Related: 4 Ways to Build Your Credit
2) Dispute Negative/Incorrect Marks
If you do happen to find any negative or incorrect marks on your credit report, report them immediately.
Anything can possibly be incorrect on your report, including:
- amounts owed
- social security number
You’ll want to make sure you take care of these incorrect marks quickly as it may have some impact on your reports. Once the incorrect mark has been properly updated or removed, it may improve your credit rating.
You can also dispute negative items on your credit report. For instance, if there is an account on your report that says you still owe even though it was paid months prior, that is cause for dispute. You may have a poor or even fair rating due to negative marks such as this. Even accounts which you find are not yours or were made without your permission, are cause for dispute.
Each bureau has their own ways to dispute information on your report. You can do so online or by mail. Companies holding the account will have 30 days to respond to the dispute.
3) Negotiate a Lower Balance
Once you have figured out which accounts were incorrect or negative marks and sent in disputes, now you should have a pretty clear idea of which accounts you actually owe. If you feel the issue with the account is the balance amount, negotiate. The worse thing that may happen is they will tell you no and you end up paying the same amount.
You really don’t have to be the best negotiator to lower your balance with a creditor. Understand, they probably paid 5 cents on the dollar for your debt and would be quite pleased if they recouped 25% of your balance! So, if you can gather up a bit of money (say something like $2,000 for a $5,000 balance), make an offer to send them a check today for that reduced amount if they count your debt as paid in full. Never give them electronic access to your bank account and always get the agreement in writing (via a letter or an email)!
Again, the worst thing that can happen is they say no!
If you can make your payments on time, make sure to do so. It is good to show you have a reliable payment history.
On-time payments can also improve your credit score. While making payments on time may seem difficult right now, try to show that you are attempting to make your payments on time. Even if it’s only what you can afford at the moment.
5) Pay Down Outstanding Balances
Another great way to increase your credit score is by paying down your outstanding balances. A good way to start is by using the debt snowball method. It can help you get your payments down easily and efficiently. You can end up becoming debt-free in the least amount of time, depending on the amount of debt.
6) Increase Credit Limits
If you’ve been making your payments on time and building a good credit history, you may be able to increase your credit limits. Sometimes, you may even be offered higher credit limits for being a good customer and utilizing your credit wisely. However, in most cases, you could just ask for a credit limit increase.
You can do this by requesting a credit limit increase online through your credit issuers site or you can call their customer service line for assistance. Either way, it never hurts to ask. It also doesn’t harm your credit score by asking for an increase.
“What’s the purpose?” you might ask… The lower your credit utilization, the better. So, if you raise your credit limit, you’re using less of your credit, which credit rating agencies see as responsible (since you’re not maxing out all your credit options).
Related: Do You Need a Credit Card?
Are You Ready to Repair Your Credit?
During these times of economic crisis, you’ll still want to have good credit when you come out on the other side. As long as you have a decent emergency fund, now is the best possible time to start repairing your credit. So, take a little time out to focus on your credit score, you’ll be happy you did!
Do you feel your credit could use some work? Did these tips help you repair your credit?
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.