A good credit score is crucial for accomplishing certain important tasks such as renting an apartment, purchasing a home, or obtaining a loan. However, a number of financial mishaps can damage your score. Here are some tips on how you can repair your credit score and get it back up where it should be.
Know Credit Score Basics
A number of factors impact the calculation of your credit score. One of the most important is your payment history. On-time payments boost your score, while late payments reduce it. Other factors include the amount of debt that you owe, how long you have held your sources of credit, and the number and types of credit accounts you have open. Remember that you are entitled to perform a yearly check of your credit score from each of the three major credit reporting companies. This helps you see where you stand.
Remember to Make Timely Payments
Since your payment history is one of the most important factors and you’ll need to make timely payments for a considerable amount of time to build up your credit score, don’t leave this to chance. Set up reminders so that you know when your various payments are due.
Reduce Current Debt
Get rid of present debt by trimming excess from your budget and, if necessary, adding to your income through part-time work or other means. First eliminate high-interest debts and then move on to Low-interest items. Attempt to negotiate your interest rates. If feasible, consolidate your debt to reduce monthly payments.
Avoid Opening New Credit Sources
Keep older credit accounts open, but avoid opening any unnecessary new ones. Additionally, put off new purchases of major items that would add to your existing debt such as cars or houses. Avoid the temptation to add debt to your credit cards.
Cultivate Good Habits
Once you have mitigated disaster by improving your credit score, keep it high by establishing sound financial habits. Make payments on time, keep a good mix of credit, monitor your credit score on a regular basis, and establish a fund for emergencies.
For more advice on repairing your credit score, contact Impact Commercial Capital.