Approximately
30% of Americans have bad credit.
You probably know how much a bad credit score affects your life. You'll
probably have trouble getting access to the credit you need and if you do
qualify, you end up paying higher interest rates, making credit less
affordable. It might mean you can’t afford to do things like getting a new car or
new home, and you may not have access to funds in the event of an
emergency. Luckily, with a little hard work, you can work to raise your
credit score.
If you’ve missed a
payment on your credit card or loan, your credit score will take a hit. The greater
the amount of missed payments and the later they are, the lower your credit
score will be. That’s why it’s important to start making payments on time. This
won't remove previous late payments, but it will prevent further damage to your
credit score. Think about automating your payments if you tend to forget about
them. As time goes by, late payments start to have less of a negative
impact.
Another way you can work
on building your credit score is to pay off credit card balances, especially
high balances. There’s an additional advantage to this: credit cards often
have high interest rates so paying down balances can also save you some money in the
long run.
The average American carries more than $6,000 on credit cards
Credit card debt has
hit an all-time high. The average American carries more
than $6,000 on credit cards,
which can impact your credit score, especially if you have a small credit limit.
If you can, try to pay down credit card debt. You can start small by trying to
put more than the minimum payment due toward your credit card, even if it’s
only $10 a month. It just may not be possible to tackle all your debt at
once. But you can, try to pay more toward it to pay it down quicker. Another
option would be consolidating your debt.
Did you know that each
time you apply for new credit, your credit score drops a little bit? The reason for this is
that it creates multiple inquiries on your account. Too many inquiries in a
short amount of time can indicate that you’re in financial distress. When you
apply for new credit, be strategic about when you apply and how many accounts
you open within a specific time period.
You might think that
one way to reduce the amount of credit on your credit reports is to close any
unused accounts you have. This strategy can actually backfire by raising your credit
utilization ratio and decreasing the amount of time you’ve had credit. So long
as the unused account isn’t costing you, it can improve your credit score.
You can start improving
your credit today. It takes time, a strategy, and commitment but you can do it.
If you’re not sure how to get started, or how to fix errors on your credit
reports, call our credit repair experts. Get in touch today for a free credit evaluation to
see if we can help you.
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