How to Avoid a Bad Credit Score

Did you know that 21 percent of consumers in the United States have had credit card applications rejected in 2020? Not only does a bad credit score make it hard to open new lines of credit, but you’ll also have difficultly getting loans for homes and cars.

The weight of your financial situation may seem overwhelming. However, it’s important to keep in mind that credit repair is more than possible. It all starts by researching and executing a few financial strategies. 

Read on to learn how you can attain a good credit score through some simple strategies today!  

Stop Applying for Multiple Cards

If you’re in need of a credit card, you may be tempted to apply to a number of credit cards at once. Just like applying to a job, you may assume that the numbers game works in your favor. Don’t fall into this trap. 

Nearly every time you apply for a credit card or loan, the lender will run a hard inquiry. Multiple hard inquiries over less than a six-month period can knock your credit score even lower.

Instead, apply to credit cards that only do a soft inquiry. You can also research your chances of being accepted and only apply for cards that accept low or no credit. 

Always Pay Your Bills

The more you miss your monthly payment on your credit cards, the more damage your credit score will take. Make sure your payments are automated or you put it on your calendar so you never miss a payment.

You’ll also want to pay your entire balance instead of just the minimum. Late payments can also lead to fees, and if your payment is 30 days late or more, you may receive a negative mark on your credit report that will stay on for seven years.

Pay Attention to Credit Utilization

Along with paying your bills on time, it’s also important to keep in mind that you don’t want to use all of your available credit. The typical recommendation is to only use 30 percent of your credit. However, to improve a credit score, it can be beneficial to reduce your usage to as low as 10 percent.

Only apply for more credit once you’re ready to take on the additional responsibility of paying off a larger balance each month. You’ll also want to avoid applying for additional credit cards or loans unless you believe they’re necessary. 

Check Your Credit Report

It’s easy to start forgetting about your credit score and report once you get into a comfortable routine. However, it’s recommended to check your credit score at least once every few months so you can monitor your progress. If your credit score dips, you may also be able to rectify the situation quickly with a lender. 

Errors on your credit report are also impossible. The faster you spot them, the quicker you can get them resolved and improve your damaged score. 

Remember that you can receive a free credit report every 12 months through 

Contact Your Creditors

Everyone experiences hurdles in their lives. If you find that you’re not able to pay your monthly balance, contact your lender immediately and explain the situation.

You’ll find that they’re more than willing to help accommodate your needs, whether that be giving you a short-term extension or negotiating a lower interest rate.

This can help you avoid a missed payment on your credit report and come away with a better payment plan. 

Consolidate Your Debt

You may find that you have a large number of cards with small balances. However, this can backfire on you as it’s harder to keep track of the balance on each card as well as their payment dates. Instead, it’s recommended to transfer those balances onto a balance transfer card.

Not only is this easier to keep track of, but you’ll be able to make quick work on your debt and improve your credit score.

Balance transfers typically take a few weeks. It all starts by filling out a form online or talking with a customer representative in order to describe the debt you want to transfer.

You may find that some credit cards have rules on the types of debt they’ll transfer. For example, you usually aren’t able to transfer your debt from a Discover card to another Discover card. 

Trust the Process

It’s important to keep in mind that building credit takes time. Even if your application for a credit card is accepted and you pay your full balance every month, it may take a few months to a year to see an improvement in your score.

Focus on paying down your high-interest cards in order to save the most money over time. You can also choose to pay off your smallest debts if you need the quick wins and extra motivation to keep going. 

If you create a budget, keep your credit utilization in check, and gradually eliminate your debt, you will see your credit score improve with time. 

Improving Your Bad Credit Score is Possible

The major takeaway we want you to know is this: improving your bad credit score is more than possible. With the right knowledge, planning, and execution, you can bump up your credit score in a matter of months. 

Once your credit score is improved, continue building credit by paying off your monthly balance, keeping your credit utilization low, and avoiding applying for too many credit cards or loans at once. 

Ready to work with a team of experts who are ready to help you improve your credit? Schedule a free consultation with us today to get started!