So, you’ve made a few financial mistakes and now your credit score is lower than you would like. We all know that credit scores are important, especially if you want to purchase a home, get a loan, or buy a car. Fortunately, it is entirely possible to boost your credit score on your own. Here are three steps you can take today to raise that score.
First, go over your credit report in depth, paying attention to any negative marks. It may be too late to work on your payment history, but you can pay off small debts that are just dragging down your score needlessly. If you have a couple collections on your account, each account can reduce your score by up to 100 points! When those collections are smaller amounts, perhaps under $100, it really makes sense to quickly pay off the debt and move on. Your score will only go up if you pay off debts, even if they are debts that you don’t want to pay or do not think you really owe.
Next, find a low-deposit secured credit card and apply for the card. You will be required to make a down-payment of $50-200, but that will then become your credit limit. Use this card every month for items you will buy anyway, such as gas or groceries. Here is the most important part – pay that card in full every single month. This shows that you understand how credit works and that you can use it responsibly. Doing this regularly will help your credit score climb higher and higher every month.
Finally, sit down and make a detailed budget. Determine what you want to pay off from your credit report, and how much money you make each month after paying essential bills (rent, electricity, etc.). Pay off small debts first, because they can easily be paid off completely. After you have paid all of your small debts, continue to work on the larger debts, paying what you can afford each month.
This plan may take some time, but it is very rewarding to see your credit score rise and your debt go down. In the end, taking these three simple steps today will help you get the absolute best rate on your dream home, business loan, or that perfect vehicle. If you would like more credit repair tips, please contact us today.