How to Fix Poor Credit

By Arthur B. — Published February 06, 2018

How to Fix Poor Credit

How to Fix Poor Credit

So, you got your hands on your credit report and the credit score doesn’t look so good. Well, you’re not alone. Actually, a lot of people in the US live with bad credit, but, yes, it’s something that shouldn’t be taken lightly.

Bad credit scores can lead to all sorts of problems. Your loan or credit card applications can be declined outright, which can be horrible if you’re in a financially tight situation. Then, there’s the likely chance that your insurance interest rates will shoot up too.

The point we are trying to make at the end of the day is that bad credit scores are a major problem. However, all hope is not lost. There is some light at the end of the tunnel. You see, credit scores can be fixed. Of course, it’s not an easy task, but it’s definitely executable.

In fact, we’ve listed out a few steps that you can follow to boost your credit score.

Review your credit report
Make sure you review your credit report. You see, a bad score isn’t always the result of bad financial management. It could be the result of inaccurate information being present in the credit report.

This is especially true if you have an extensive report. Something is likely to have gone wrong. So, take the time to look at each entry carefully. Spend as many hours or days as you need. You never know what you might find and that could very well mean the difference between getting a loan approval and not getting a loan approval.

If you do find inaccuracies, raise a dispute. Your credit report will likely have instructions regarding how to go about the whole thing. Generally, you have about 3-4 options. The first is to go online and raise the dispute with the respective credit bureau. Otherwise, you can do the same via phone.

However, we have found that sending disputes via mail is the best option. For starters, you can also send along the evidence needed to prove the entry as inaccurate. Other than that, there is also the comfort of knowing your report has actually been received.

You see, you will receive a return receipt when the mailed dispute reaches the credit bureau. So, you know that your dispute will be looked at.

Expect the credit bureau to get back to you in about 45 days.

Get rid of debt
Now, an error in the report could lead to a low score. However, it’s very rare. More often than not, low credit scores occur because you’re at fault. It’s very likely that you’ve racked up some serious debt. So, start fixing that.

Reducing your debt isn’t going to be an easy task. However, it must be done for your own good. Even if your credit score doesn’t improve greatly, the very fact that you’ve reduced your debt puts you on a good financial path.

One of the best ways to end debt is to stop using your credit cards. You can even go so far as to block them temporarily.

Then, develop a payment plan for the accounts that you have to make payments towards. Use most of your budget to make these payments and eliminate unnecessary spending. Focus on the key accounts first and settle for minimum payments on the less important accounts.

Make timely payments
Delayed payments also impact your credit score. So, make sure your payments are made on time. Establish reminders and stick to them. You can also create rules in your bank account for automatic payment when neccessary.

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