How to Fix Your Credit: A Complete Guide

Unfortunately, your credit score can have a large impact on your quality of life. Those with a high score are unlikely to encounter issues when securing financings, such as receiving a loan for a house or a car.

Those with lower scores, however, may have problems moving into a new apartment.

If your credit score is are lower than you would like it to be, there are steps you can take in order to resolve this situation. Let’s explore everything you need to know about how to fix your credit.

Dispute Errors on Your Credit Report

One of the fastest ways to help get your credit back on track is to search for any errors that may be on your credit report. This could be due to somebody else opening an account in your name and then racking up a balance, or it could simply be due to a filing error.

Regardless of the cause, it’s essential that you discover this information as quickly as possible. This is due to the fact that you will need to dispute these errors in order to rectify them.

The good news, though, is that credit bureaus are legally obligated to fix any errors within a timely manner. To help expedite the process, be sure to provide any documentation that can serve as evidence of your claim.

Ask For an Increase in Your Credit Limit

The larger percentage of your available credit you use, the bigger impact it will have on your score. To help clarify, let’s assume that you have a total credit line of $10,000.

If your outstanding balance is $8000, this shows your creditors that they likely can’t expect you to pay off this money within a short period of time. If your balance is only $1000, however, this will have a lower impact on your credit score due to the fact that this amount is a much lower percentage of your total available credit.

By increasing your credit limit, your available balance will immediately serve as a lower percentage of your total credit. In the above scenario, let’s also assume that you were able to increase your total credit limit to $10,000.

Now, your $8000 balance is only 40% of your credit line as opposed to 80% of it. This change will be reflected in your next statement, and you may find that your score has increased substantially.

Take Care of Any Past-Due Payments

Late payments are one of the most significant ways that people harm their own credit score. However, payment isn’t considered late until it has been past due for over 30 days.

After this time period has elapsed, credit bureaus will officially acknowledge this payment as being late. This is something that can easily drop your credit score by a large handful of points.

The later the payment is, the bigger decrease you can expect to witness in your score.

Prioritize Paying off Low-Balance or High-Interest Accounts

It should come as no surprise that leaving a substantial balance across multiple accounts can easily become overwhelming. If you find yourself having to deal with paying off more than one credit card, it’s in your best interest to focus on one with a low balance or a high interest rate.

By completely paying off a card, it will no longer accrue interest. If this isn’t an option, paying down the balance of a card with a substantial interest rate will help you avoid incurring additional interest over time.

It’s also worth noting that completely paying off accounts can allow you to devote all of your future payments toward your other accounts that need your attention.

Work With a Credit Repair Company

Interestingly, many people tend to forego this option. Under the right circumstances, it can be one of the most effective routes to take.

A credit repair company will help you handle the obligations listed above (and many others, as well). This allows you to focus on other aspects of your life as opposed to managing your credit issues.

When searching for a credit repair company, it’s imperative that you find one that has a strong online reputation. Unfortunately, there are repair companies out there that intend to mislead people by promising unrealistic results.

So, keep this in mind when moving forward.

Apply for New Credit Card

As previously mentioned, increasing your total line of credit can help improve your score. However, you aren’t always able to receive approval for one.

Fortunately, this doesn’t stop you from having the ability to open a new credit card.

For those who are unaware, any account that you open under your name is immediately factored into your credit line. Although it may take a few days to reflect these changes after your account approval, this is essentially the same as increasing your credit limit through other means.

Keep in mind, though, that opening a handful of accounts within a short period of time can actually hurt your score. This is due to the fact that you may give off the impression that you are in desperate need of money, something that could cause credit bureaus to perceive you as being financially irresponsible.

Understanding How to Fix Your Credit Might Seem Difficult

Fortunately, the process is much easier than you anticipate. The above guide provides all the information you need to know about how to fix your credit and get your life back on track.

Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.