8 Tips to Repair Your Credit Starting Today

repair your credit

Bad credit makes life harder than it needs to be. If you’ve got bad credit, you pay more for loans, and credit card rates are higher. If you’re trying to buy a home, you may have to pay for special PMI insurance or put more money down.

If you’ve ever turned on utilities in an apartment, you know the company checks your credit. If your credit is bad, you may have to pay a security deposit. It pays to fix your credit.

Do you have bad credit? Repair your credit to make your life easier and less expensive.

We’ll give you eight tips to help you repair your credit now.

1. Start With Your Credit Report

Before you start, it’s important to know your current credit score. The law states you can have one free credit report per year from each of the three major credit bureaus. You can get your free credit reports online at annualcreditreport.com.

AnnualCreditReport.com currently offers weekly credit reports due to Covid-related identify fraud. You can also go to each of the three major credit bureaus online and request a credit report from each. Note that TransUnion does redirect you to AnnualCreditReport.com for your free report.

Have you had a recent loan rejection due to bad credit? You’re entitled to an additional free credit report.

Once you have your reports, spend some time ensuring that all the information in each report is correct. This is important because sometimes there are errors. Correcting a major error can lift your credit score.

Also, make sure all your identifying and personal information is correct. Why get all three reports? Because some of your creditors may report to one credit bureau and not another.

2. Repair Any Errors

The first step in credit restoration is fixing any errors on your credit reports. It’s a fact of life that sometimes credit bureaus make errors. One in 20 consumers saw a score change of over 25 points on disputing credit report errors while one in 250 had a change of more than 100 points!

It’s crucial that you check your credit reports every year and dispute any errors. You can dispute errors online, by email, or regular mail. While online is the most convenient, by mail offers the best paper trail.

Medical bills are a common cause of negative remarks on credit reports. Some providers send your bills to a collection agency while you’re waiting for the insurance carrier to pay. You may not realize the bill went to collections.

Disputing online? Click on the “dispute” button on the credit bureau’s website. Then answer the prompts that follow.

In the case of the medical bill, it could be that the creditor agreed to remove your liability after the insurance paid the bill but they never communicated that to the credit bureau.

When disputing a bill, make sure you have the correct supporting information to substantiate your claim.

3. Talk to Your Creditors

Everyone forgets now and then.

Do you normally pay your bills on time? Did you make a late payment on one by accident? It’s not uncommon for a creditor to remove the late payment from your credit but you must ask.

Call the creditor and be courteous. Point out that it’s normal for you to pay your bill on time but that you forgot. Most will forgive the one mistake and you can have it removed from your credit report.

That leads us to our next point.

4. Make On-Time Payments

Making on-time payments is important to your credit score. You can set up most payments in your online banking, making it easy to pay your debts on time. Your payment history is the most important factor in keeping your credit score high.

Are there any incorrect late-payment entries on your credit score? Be sure and dispute those with the credit bureau.

Are you having trouble making a payment? Get in front of it and call ahead to discuss the situation with the creditor.

Get yourself into some simple habits, like paying bills on time, to keep your credit score high.

5. Increase Your Debt-to-Credit Ratio

Another way to fix your credit and raise your credit score is to raise your debt-to-credit ratio. This means having a lot of unused credit. This is your credit utilization and it’s the second most important part of your credit score.

Aim for a credit utilization of 30% or lower. Do this by keeping your accounts paid off as much as possible.

One of the easiest ways of raising your credit utilization score is to ask your credit card companies to raise your limit. A higher limit while paying down your debt raises your utilization score because it results in a higher unused amount on the account.

6. Don’t Close Old Credit Accounts

Closing old credit accounts that you don’t use isn’t always the best move. Keeping the old accounts open can help increase the debt-to-credit ratio. Keep an eye on those old accounts to make sure you’re not missing any annual fees which could affect your credit score.

7. Pay Down Debt

Starting with your highest-interest debt, start paying down all your debt. Tighten your budget and put any extra toward those high-interest credit cards and debts.

Be aware of compound interest. If you only pay the minimum amount each month, you may never pay off the debt. Rein in your spending as much as possible so you don’t waste money on interest payments.

8. Try a Credit Repair Company

If you’ve got yourself into a lot of debt and you’re not sure where to start, you can also use a credit repair service. For a fee, they’ll help you fix your credit.

They’ll meet with you first, go over your credit history, and show you the fastest and easiest ways to work on raising your credit score. Some companies only charge you after they’ve raised your credit score.

Repair Your Credit for Peace of Mind

When you repair your credit, you’ll have peace of mind knowing you’re paying less and your money is going further. Don’t let bad credit hamper your life.

Let the Credit Agents give you a free 15-minute credit review and start credit restoration today!