Acquiring things in life will take a lot of work. When the time comes to buy a home or a car, you will need to find a way to get approved for a loan. The first thing a lender will look at when trying to decide on whether or not to give you a loan is your credit report. If your credit report is less than stellar, it can affect your ability to get approved for a loan. Often times, you can hire credit repair companies to help you improve the credit score that you have. While these professionals can help, there are a variety of things you can do on your own to improve your credit score. The following are just some of the things you need to focus on when attempting to rebuild your credit.
1. Pull Your Credit Report
The main thing you have to do when trying to rebuild your credit is to get a copy of your credit report. There are a number of different websites out there that will allow you to get a copy of this report for free. Once you have this report in hand, you need to inspect it thoroughly for any inconsistencies that may exist. If you do find a number of different inconsistencies, you will need to contact the major credit reporting bureaus to dispute this information. The last thing you want is to be punished due to mistakes being made on your credit report. While it may take some time and effort to remove the inconsistencies on your credit report, it will be well worth the work you put in. Once you have removed the errors from your credit report, you can begin the process of increasing the overall credit score you have.
2. Paying Bills on Time is Important
If you are in the process of rebuilding your credit score, then you need to focus on keeping all of your bills paid on time. Even one late charge can affect your credit score, which is why you need to exercise caution when it comes to paying your bills. Most people fail to realize that their payment history makes up around 35% of their total credit score. This is why paying bills on time can help you increase the credit score that you have over time. Most of the time, a string of on-time payments will cancel out any late payments you may have had in the past.
3. Decrease the Balances on Your Credit Cards
For most people, having credit cards is essential. These cards are a great way to acquire possessions without having to wait to save money. While these cards can be quite helpful, they can also get you in trouble. Most credit report experts advise that you do not let your credit card balances go over 30% of their total limit. If your balances are well over this amount, then you need to devise a plan on how to pay down your balances. Once you have paid down the balances on your cards, you need to focus on keeping them as low as you can.
4. Avoid Applying For New Lines of Credit
Another important thing you need to do when trying to improve your credit score is to avoid applying for new lines of credit. The more hard credit inquiries you have, the lower your credit score will ultimately go. During the time you are trying to rebuild your credit, you need to avoid applying for any new credit cards or loans. This type of restraint will serve you well in the long run and can make increasing your credit score much easier. Applying for new cards will only lead to your working against yourself regarding your mission to reclaim a good credit score.
Finding a credit repair service with experience is a great way to get guidance during this difficult process.