Fixing Bad Credit: A Step-By-Step Guide

Having bad credit can keep you away from a lot of the things you need to take care of in life. It can also be quite difficult to recover from a bad credit score. However, you should keep in mind that it’s not completely impossible. It’s just going to take a lot of planning, patience, and making the right economic choices. Here are some steps you can take to recover your credit score.

1. Checking Your Credit Report

Many people turn to bad credit car dealerships utah when they know that their credit score isn’t the best. But not many of them know that there could be errors and inaccuracies in their credit report. It is rare, but it does happen from time to time. That’s why it’s important to look at more than just one credit report source so that you can get an average number to work with.

There are some details to examine when reviewing your credit score, including:

• Personal information: your name, your address (both past and current), your birthdate, and your employers.
• Accounts: these include your current open credit accounts and any closed accounts from the past 10 years. If there are any accounts that you don’t recognize, payments that have been inaccurately recorded as late, or any other potential errors, you should let the proper authorities know immediately.
• Credit inquiries: inquiries occur when a person or company accesses your credit report. What are called “hard inquiries” are made when you apply for credit.

2. Dispute Any Credit Errors

If you notice any negative information in your report that is inaccurate, you should file a dispute with the relevant credit bureau. This is because these errors can negatively affect your credit score which can make it difficult for you to get loans or even purchase a car. Errors involving your personal information are not going to affect your score but should still be corrected as soon as possible.

There are different ways to file disputes, depending on the credit bureau. Typically, they can be done online, over the phone, or by mail. Once a dispute has been filed, then your records will be checked and any inaccurate information will be corrected; anything that cannot be verified will be deleted or updated.

3. Set Up An Autopay

Once you take the steps to get all of your accounts up to current, then you need to make sure that they stay that way so that your credit score doesn’t drop again. One of the best ways to do this is with autopay. Autopay is pretty standard with today’s technology, allowing you to pay your bills automatically and on time. For things like credit cards, you can set up your autopay to make the minimum payment, but it looks much better to creditors if you pay the full amount every month. You should always make sure that you have enough money in your accounts to cover these autopays too so that you’re not incurring overdrafts.

4. Pay Off Debts

Now is the time to create a budget that you can follow so that you know exactly where your money is going instead of scrambling at the last second to pay off your bills. By having a budget dedicated only to bills, you’ll realize just how much extra money you have at the end of each month. But this shouldn’t be an incentive to use it willy-nilly. If you can, save as much of this extra money as possible to pay off your bills for the next month.

Another option is to get a debt consolidation loan. This can be used to pay off your credit cards, and then the loan can be paid back over time in fixed monthly installments. Although there is interest involved, rates are typically lower than credit card interest so it should be manageable.

5. Don’t Apply For New Credit

Whenever you apply for new credit, a lender is going to check your credit report. This briefly lowers your credit score by a few points. If you are in need of a debt consolidation loan, then you shouldn’t apply until you can find loans that you actually qualify for. There are online tools that you can use to find loans that match your credit score so you can more easily find the ones that you would be approved for.

6. Apply For A Secured Credit Card

A secure credit card works just like a regular card, except that it requires a security deposit. When applying you first put down a refundable security deposit that determines what your credit limit is. If you don’t pay your bill, then your provider will use the deposit to pay it.

This lowers the risk while still allowing you to have a secured credit card with a bad credit score. it should only be used for small purchases that don’t exceed your credit limit. make sure that the balance is paid on time and in full each month.

7. Get Credit Counseling

Challenging situations can be made a little easier if you have some support from the right people. You can seek the assistance of a nonprofit credit counseling agency that can help you get your credit back on track and teach you the methods and practices to keep it there. They will go over your finances with you and help you create a plan that tackles any issues you may have, including budgeting, managing money, and paying off debts in a timely manner.

Rebuilding your credit does take time, so don’t get downtrodden by the journey you’ll have to take. Through perseverance and patience, you’ll start to see some positive results in no time. The more effort you put in, the more you’ll get out of it. You could sign up for credit monitoring that will provide you with alerts when a new activity takes place on your credit report.

If you’re eager to get your credit back into good standing, be sure to speak to a professional to provide with guidance and practices as soon as possible to make it happen.