Improve Your Credit Score Simple Steps
Home & Mortgage
Having a good credit rating can make life a lot easier. You can get a credit card, rent a property, get in-store financing, buy a house, and the list goes one. Very few people nowadays can get by without some sort of credit, so you need to do everything you can to make credit easy to get. There are a number of credit bureaus that keep track of you during your lifetime, and as soon as you default to a creditor, it will be added to your credit history.
Once your credit has been damaged, its important to do everything you can to repair your credit. It takes time and patient to complete the process of credit repair, but theres no doubt that its worth it. Building a better credit rating will make your financial life much easier long-term. So what can you do to start the process of credit repair?
One of the big problems with defaulting and debt is that it tends to feed on itself. Once you get into trouble, you get hit with extra fees and charges, which means you have to try and find more money to pay back, and it just goes downhill from there. Thats where credit counseling can help. A good counselor will look at all your financial circumstances, put together a budget that should be manageable for you, and give you advice and direction to start the credit repair process.
Its important to make sure that youre dealing with a credit counselor. They will usually be associated with a non-profit organization and will primarily give you advice, rather than offering to do everything for you. There are credit repair companies who offer to fix your credit, but far too many of these have dubious ethics and charge fees that will put you even further in debt than you are already. Although credit repair is tedious, you can certainly do it yourself and should avoid paying someone else to do it for you. A credit counselor is also more beneficial because they teach you what you need to do to improve your situation and avoid getting into trouble again. A credit repair company, if youre lucky, may sort out the mess for you, but chances are youll get back into a mess before too much time passes.
Add Accounts To Your Credit Report
Sometimes the problem with your credit history is that theres not enough history there. Your credit rating isnt just based on how well you conduct your credit affairs, but also based on volume. So if youve had lots of credit and handled it well, youre considered a better risk than someone without much credit history at all. Sounds crazy, but thats the way it works! So if you dont have much on your credit history, it can be worth adding some other accounts to your credit report to help build your score. Often credit from smaller organizations doesnt get added to your history, so it can be worth adding things like department store cards or gas-cards. As long as the details can be verified, most credit bureaus will agree to add the information to your file. Remember, however, that they dont have to comply, and they may charge you a fee for doing it. Still, if it helps to improve your credit rating quickly, it can be worth paying the fees to do it.
Check For Errors
This may seem obvious, but you should check your credit history carefully to make sure there arent any errors. The reality is that there are probably lots of other people with the same name as you, and mistakes do happen. Also, with the increase in the amount of identity fraud occurring, particularly online, its possible that someone may have tainted your credit rating without you even knowing about it. Immediately take steps to rectify any errors you identify.
Credit repair takes time, and it takes patience. But in the long-term, you will be glad you made the effort to correct errors, add extra accounts and work with a credit counselor. Remember, too, that although it takes a long time to build a good credit rating, it can be damaged again very quickly. So dont let your hard work go to waste. Take on board any changes you need to make to your budget or spending habits, because in the long-term youll be very glad you got your finances back under control.
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