Bad credit can cause all sorts of problems as you stumble through life’s financial hurdles but actively looking to correct your credit rating can make a huge difference and save you money along the way.
There are times where your credit use may have been misreported or errors have appeared on your record. This can severely damage your score and can be easily rectified when you contact Equifax, Experian or the TransUnion. You are entitled to one credit report from each of Equifax, Experian and TransUnion every 12 months.
This is more for those who are just starting out and do not yet have much of a financial footprint. If you don’t currently pay bills or have a job, there is not going to be a valid paper trail to determine how well you manage your money. If you get a credit card and use it correctly you will be surprised how quickly your credit will improve.
If you are having trouble getting credit card approval, you should look towards a prepaid credit card. Initially, you deposit an amount that equals the credit limit of the card and if you fail to make a payment, it is then deducted from your deposit and your card is canceled. Although you are technically borrowing your own money, it is a great way to build your credit with little to no risk.
Using your cards correctly means not maxing them out. Only use what you can afford to spend. Credit card debt is the worst offender when it comes to debt in the US. Credit card interest rates are a lot higher than other forms and can easily spiral out of control and leave you with a mountain of debt. Just because your card has a large limit doesn’t mean you should use it. A credit card should only be used in emergencies and if you know you can clear the balance at the end of the month.
When it comes to credit, on time is the only time. If you are constantly missing payments, you may as well kiss your credit rating goodbye. Clearing your credit cards at the end of the month not only saves you on interest but looks great in the eyes credit unions.
If you can, clearing unnecessary debt is a must. It may take a chunk out of your savings but your current level of debt could stop you from borrowing when you really need it.
If you are not having money issues and are completely stumped as to why your credit score is so low, you can take your case to the professionals. There are credit cleaning companies you can pay to improve your credit score. Results vary depending on the quality of credit cleaner, but it is well worth doing. You should try to clean your credit yourself before you go straight to a credit cleaning company as they may charge you for correcting a simple error on your credit report.