Whether you’re looking to save money on loans or credit cards, have a more attractive financial profile when applying for jobs, or want to be able to qualify for one of the best rewards credit cards, a good credit score is important. However, if your credit has suffered due to poor spending habits or other factors out of your control, the road back to a healthy credit score can be long and difficult. But with patience and consistent responsible behavior, you can rebuild your credit over time.
Before you start, it’s worth getting your free credit reports from the three main credit bureaus. Taking the time to read them thoroughly can help you spot errors, which should be addressed right away. It’s also a great way to get an idea of what your credit score is and where it stands in relation to the national average.
You’ll want to focus first on paying any accounts that are close to going past due, if you haven’t already done so. Keeping these balances low will help improve your credit utilization ratio, which makes up 30% of your total credit score. You should also make sure your accounts are reporting correctly to the bureaus, as inaccurate information can drag down your credit score.
Credit repair companies specialize in deleting inaccurate negative information from your report. However, you can do this for yourself much more cost effectively by disputing your own errors through the credit bureaus themselves. Just be wary of any credit repair company that charges you a fee to dispute incorrect information on your behalf, as this is likely a scam.
Another key step in fixing your credit is to limit the number of new accounts you open. When you apply for new credit, it triggers a hard inquiry on your report that can drop your score by a few points. It can also lower your average account age, further hurting your credit score.
Lastly, be careful when you shop around for credit cards. When you compare offers, it’s easy to miss terms and fees that can add up quickly. Read the fine print carefully to avoid getting stung with hidden fees, and always pay on time to maintain a good payment history.
Rebuilding your credit requires patience and diligence, but it’s well worth the effort in the long run. By following these tips, you’ll be on your way to a better credit score and a brighter financial future. how to fix my credit