Credit problems are all different. They are not the same since the cause of low scores depends on your factors on personal credits history, your financial situation and the style you use to manage your money. It could be late payments, collections, bankruptcy, a big number of inquiries or even credit report mistakes. It does not matter what your reason is. They all have a negative impact on your score. So how do you improve your credit score? We came up with a guide to help you do so in this article. So, let’s learn.
- Find out the Things that Impact your Credit Store Negatively
There are five factors that your credit stores depend on. They include;
- Payment History
It shows if you have paid your debts on time, always.
- Credit Utilization
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- Credit Age
It portrays the amount of time you have used to maintain the credit accounts.
- Credit Mix
This is the different credit accounts you have. If you have more than one type, then that is proof that you manage many credit products.
- Inquiries
They show the number of times you have applied for credit and the types you have applied for.
- Find Out Which Factors Cause Low Credit Score
After checking your free annual credit reports which are available at annualcreditreport.com, you will see the factors that lead to your credit scores being low. After comparing them with your free credit report card on Credit Sesame, you will then know what it is that you are required to do to improve your credit score.
What’s the Worst that could happen to your Credit Score?
- Maxing out a credit card
- Letting go of an account delinquently.
- Picking up a negative public record
- Identity theft
- Improve your Credit Utilization
This is necessary to get a quick credit bump. You can do this by;
- Making Huge Lump Sum Payment
Make the payment on your credit card debt. The score will increase while the balances will decrease. Find ways to use the following bonus or the next tax refund to pay off the balances.
- Getting a Credit Limit Increase
Do this without increasing the debt. This will work if you have good credit. Make sure you can handle a more significant limit or the additional cards.
Lastly, in case you have poor credit, make use of different types credit accounts. You can also get a secured credit card to start paying on time. Do not forget to handle the unpaid collections carefully. There are consumers that succeed with debt settlement after a creditor accepts an amount less than what is owed to them. After paying off a collect account, keep track of your credit report.
