You Can Repair Your Credit Score
Many people wait until they need to apply for a loan before they think about their credit score. After everything that has happened in the last 5 years, financial institutions are paying closer attention to each person’s credit score. Typically, a person with a credit score less than 700 will be turned down when they apply for a new loan.
Let’s talk about some quick credit repair tips that will help you get started on repairing your credit score. Of course it will be up to you to decide which ones you will work on.
Check for Errors on Your Credit Report
Sometimes your credit report will contain errors that contribute to you having a low credit score. It is up to you to review your credit report annually and to dispute any errors and to make sure they are removed from your report. Errors can include things such as debts being listed on your report that are not even yours. As well your report may include old debts that you paid off years ago but still show up with outstanding balances. Your credit score will improve once the errors on your report are cleaned up.
Delinquent Accounts
Any of your accounts that are delinquent need to be addressed right away and the accounts need to be paid off quickly. When you have delinquent accounts, you get a negative mark on your credit report and that is going to cause a big drop on your credit score, which could affect your life in many ways.
Phone the bank or credit card company that hold your delinquent accounts and speak to them about negotiating a repayment plan. Tell them that you are now in a position to repay your loans and repair your credit and that you need them to work with you so that you can get this done as soon as possible.
Pay in a Timely Manner
35% of your credit score is based on how well you make all of your payments. Late payments on any loan or credit card will automatically decrease your credit score and will remain on your report for several years. Create a plan with a schedule that reminds you when your payments are due each month and make sure that you make your payments early, especially if you are mailing them in.
Outstanding Balances Are Very Important
Not too many people understand the role that outstanding balances play in the calculation of their credit score. Your credit score is calculated based on the ratio of your outstanding balance on each loan versus your credit limit on each loan. To repair your credit and keep it in good standing you need to ensure that your outstanding balances are 30% or less than your credit limit on each loan. Anything more than that places you in a high risk category and decreases your credit score.
Consider a Consolidation Loan
When you are looking for quick credit repair applying for a consolidation loan may be a good solution for you, especially if you owe a lot of money to various creditors.
When you combine all your past due or maxed out credit card debts into a debt consolidation loan, the creditors have to show you are paid in full on your credit report. You still want to make sure you keep one of your older credit cards open and use it every so often because the amount of time you have had credit affects your credit score.
There are many quick credit repair tips, but the important thing is that you work on ways that best suit your finances.
Worried about your financial survival? Get 25 easy saving money tips now and a Weekly E-course on “Easy Ways to Save Money”. Claim your free download at SimpleWaysToSaveMoney. As well you can checkout our Simple Ways to Save Money Blog for lots of information on “How to Save Money”.
Tags: consolidation loan, credit cards, credit score, debt, finances, financial freedom, Financial survival, live debt free, Money, pay off debt, Quick Credit Repair, save money, saving money tips