Having a good credit score is important, especially when you need to make big purchases like a house or a car. It can also come in handy when you need to make credit card purchases on things like computers, phones, or furniture. It’s essential when you want to rent an apartment, and it can even be helpful for student loans for your education. When you have a good credit score, you can also get lower interest rates on loans and credit cards.
Just as having a good credit score can be beneficial, having a poor credit score can make life more difficult. You won’t qualify for loans or credit cards, and if you do, they will be high interest. Typically, loans for bad credit have less favorable terms due to the added risk. So what do you do when you have a poor credit score and you need to fix it? There are several things that you can do to improve your credit. Here are four tips for fixing your credit score.
Know Where You Stand
In order to fix up your credit score, you first need to figure out what your actual score is. Fortunately, you can use services like Credit Sesame to get a free credit score so that you can know where you stand. It will be easier to create a strategy for fixing your credit if you know what your goals are and exactly how far you will need to go. Typically, anything under 550 is bad credit, scores in the range of 550 to 649 are poor, scores in the range of 650 to 699 are fair, scores in the range of 700 – 749 are good, and any scores above 750 are excellent.
Communicate with Your Creditors
It may be tempting to turn your phone off and ignore anyone who calls you when you are unable to pay your debts. This is not a good approach to debt management. The best thing to do when you are having trouble is to communicate with your creditors openly and honestly. If you have an account in collections for $1,000, give them a call. They might be able to work with you and take $700 or even $600 if you are able to pay them all at once.
Use Credit Responsibly
If you do still have an active credit card, that you can use responsibly, you should. This means only charge an amount you know you can pay off, and don’t utilize all of your available credit if you can help it. Also, make sure to always make payments on time.
Fixing your credit is going to take some time, and you’re going to need to be persistent. If it starts off a little slow, don’t get frustrated. Stay dedicated to fixing your financial situation, and keep working at it. Eventually, your credit will be repaired, and your score will be where you want it to be.
These are just a few ways you can go about fixing your credit. You may feel frustrated by having poor credit, but it’s important not to beat yourself up. You’re definitely not alone, and if you make a commitment to fixing your finances, you’ll get your credit score up in no time.