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REDDITLike it or not, your credit has the potential to change your life. People with good credit have a much easier time getting hired, renting apartments, and taking out loans for cars, businesses and other major life expenses; people with poor credit often find themselves turned away. It’s essential that you learn your credit score and do everything you can to fix your bad credit. Here are five ways to get started:
1. Learn how credit scores work
Once you have looked up your credit score for free at Experian, TransUnion, or Equifax, you need to learn how credit scores work. Just learning your credit score number isn’t enough; you need to know specific ways in which you can bring your credit score up.
Paying off your credit is the biggest way to bring up your credit score, but there are other tips and tricks you can learn. Do the research and learn everything you can about how credit scores work and how you can bring up your own score.
2. Start paying off your credit
As noted above: the best way to bring up your credit score is to pay off your credit. Make sure you don’t make any late payments; they can catapult your credit score even if you are working hard to pay everything off. Use debt payment tricks like the Snowball Method, in which you put all available cash towards a single debt until it is paid off, and continue to chip away at your debt until your credit score improves.
3. Work with professionals
The standard advice to “pay off your credit cards” is all very well and good, but for most people, it isn’t that simple. If it were easy to pay off credit quickly, nobody would have bad credit. That’s why people choose to turn to professional credit repair teams to help them create a plan that helps them pay off their credit while simultaneously managing all of their other day-to-day expenses.
A professional team can also solve one more problem: finding mistakes in your credit report and challenging them with the credit agencies. Mistakes happen, and they can bring down what would otherwise be a good credit score. A good agency will help find those mistakes and get them removed from your credit record.
4. Avoid credit-busting mistakes
Did you know that the act of requesting your credit score actually causes your credit score to drop? It seems unbelievable, but it’s true: every time you pull your credit score, your credit score drops a few points. This is because of the assumption that people who check their score often are people who are worried about bad credit.
Checking your credit score once or twice a year won’t hurt you, but checking it every month is a credit-busting mistake.
Here are a few others:
– Applying for more credit cards: every time you request a new credit card, even one of those “0% interest” ones that will help you pay off your credit faster, your score drops
– Closing a paid-off credit card: keep it open, so it looks like you are using a smaller percentage of your available credit
– Letting banks or retailers pull your credit score before helping you finance a major purchase: every pull on your credit score, even if it’s from a major organization, drops your score
5. Don’t slip back into bad credit
Once you begin to improve your credit score, it’s your responsibility to make sure you don’t slip back into bad credit again. You won’t be able to live your life without using credit — in fact, never using credit is another unexpected way to get a bad credit score — but you need to take steps to make sure you don’t screw up your credit again. That means always paying your bills on time, avoiding using too much of your available credit, and practicing good financial management.
