Credit is something that most people will need at one time or another. They might need it to make an expensive purchase, such as a home, or to pay for medical procedures not covered by insurance. Unfortunately, though, credit is not easy to come by, especially if you have a poor credit score.
Your credit score, which is based on a range of factors, is what helps lenders to decide whether or not they should lend to you. With bad credit, you may find it difficult to get a credit card or any type of financing. Thankfully, though, credit can be changed and mended. Whether you’re starting from the ground up with no credit, or you need to repair poor credit, there are many things you can do to strengthen your score.
Pay Every Bill On Time
It’s difficult to improve your credit score if you don’t know what affects it. And, one of the main things that affects a person’s credit score is how frequently they pay their bills on time.
If you are someone who thinks nothing of making late payments to your creditors, especially very late payments, chances are that your score is quite low and that you’ll have a hard time getting credit.
Pay all of your bills on time or, even better yet, ahead of time, however, and your credit should rise significantly. Of course, in some cases, that’s easier said than done.
If you are very behind on several bills, try and talk with your creditors to work out a payment plan to get you back on track. Or, consider taking out a loan to pay off all of your debts. That way, you’ll only have one loan payment to concentrate on. No matter how you do it, if you can get the majority of your bills caught up, you should see your credit score start to improve.
Take Out A Loan
As mentioned above, taking out a loan can be an easy way to get the money you need to pay off your debts and get your credit back on track. However, a loan can also help to improve your credit, especially if you are careful to pay it back as agreed upon.
Of course, getting a loan in the first place isn’t easy if you have poor credit, which is why you may want to seek out some less traditional loans, such as title pawn.
These loans typically don’t put much emphasis on your credit score, but instead just require that you have a vehicle title that you are willing and able to use as loan collateral. They give you money, which you would ideally use for responsible purposes, as well as a chance to start restoring or growing your credit.
Keep Your Credit Card Balances Low
Another easy way to boost your credit score is to have credit cards but to use them sparingly. Ideally, you should only use about 30% of the funds that are available to you via your credit cards at any given time.
For most people, accomplishing this means using the credit at their disposal as responsibly as possible. A good strategy is to, about once a month, use your card for a moderate purchase and then to pay the credit card balance, in full, before the statement comes due.
Check Your Credit And Report Errors
In addition to following these tips, make sure that you are checking your credit score regularly, which you can easily do for free online. When you check your credit report regularly, not only do you stay on top of any changes, but you also can catch any errors and report them right away. Many credit-checking sites will allow you to report errors with a simple click. And, if they are indeed determined to be errors, getting them removed from your credit report can aid in improving your score.
Ultimately, good credit is an asset, one that everyone should seek to build. By following these tips and trying to be responsible with your money and spending overall, you can develop credit that will empower you to achieve all the things you want in this life.