Bad credit holds you back from certain opportunities and can cost you real money in the form of higher interest rates on loans and credit cards. A good place to start is by reviewing your Experian, TransUnion and Equifax credit reports for errors.
Errors that impact your score include tax liens that don’t belong to you, outdated information and missed payments that should have been deleted long ago.
Dispute Errors
If you discover errors on your credit report, you can dispute them with the credit bureau. Incorrect information can have long-term negative effects on your fix my credit score. Whether or not the error is corrected depends on what kind of information you’re disputing. For example, if the credit bureau removes incorrect late payments from your record, your score may improve. However, removing wrongly reported aliases or addresses might not impact your score at all.
Each of the three major credit reporting agencies — Experian, Equifax and TransUnion — allows you to dispute errors with your credit report online or by mail. In your dispute letter, list the incorrect information and why you believe it’s inaccurate. Include any documentation that supports your claim, such as paid bills, letters from the company acknowledging receipt of a payment, police reports and examples of your signature (if you’re disputing forgery). Each credit bureau has 30 days to investigate your claims and send you results in writing.
Boost Your Credit Utilization Ratio
Credit utilization is one of the most important factors when it comes to your credit score. A high ratio can significantly lower your credit scores, so it’s a good idea to keep it as low as possible.
There are a few things you can do to improve your credit utilization rate. One option is to pay down your credit card balances, which will decrease the amount of debt you owe and lower your credit utilization ratio. Credit card issuers typically report your credit usage and credit limits to the credit bureaus at the end of each billing cycle, so if you pay down your balances before that happens, it will have an immediate impact on your credit score.
You can also ask your credit card issuers to increase the credit limits on your cards. That will lower your overall credit utilization rate, and you can also make payments more than once a month to help reduce your balance faster.
Make Payments on Time
The most important factor in your credit score is payment history. Missed payments hurt your credit scores, especially if you miss them for 30 or more days. If you’re behind on a bill, make it your top priority to get current as soon as possible and set up autopay on accounts that offer it.
A good credit score makes it easier to get approved for loans and credit cards with lower interest rates. But building a great credit score can take years, and bad debts can linger on your report for seven years or more.
Credit repair companies help improve creditworthiness by disputing errors on your credit reports. But you can also boost your credit score by paying down debt and applying for a secured card, among other steps. It takes time to build up your credit score, but it’s worth the effort in the long run. And if you follow these tips, you may be able to keep your credit score high for years.
Apply for a Credit Card
Having a credit card can help your score, as long as you pay it off on time. However, if you’re worried about your credit scores, it might be wise to hold off on applying for new cards. Each application triggers a hard inquiry on your credit report, which can cause a slight dip in your scores. If you do decide to apply for a card, it’s best to spread the applications out so that your credit isn’t pulled too many times over a short period of time.
Also, be sure to choose a card that reports to one of the three major credit reporting agencies, Equifax, Experian and TransUnion. This will allow the company to see your on-time payment history and other important information that impacts your credit score. If your card is reported incorrectly, it’s easy to file a dispute with the bureau. This step will ensure that the company is able to properly evaluate your application.