They say that people are not defined by a number, but tell that to someone who wants to take out a loan for a car or a home, only to be denied because their credit score was too low. In many ways, like it or not, our credit score defines us, as it affects our lives in many different and tangible ways. Yes, it affects our ability or even our opportunity to borrow when we need to for a home or a vehicle. It can also make a big difference in terms of whether or not we’re offered a lease on an apartment or office building or even whether or not we’re offered a job for which we are otherwise qualified. If you need to improve your credit score, it could be because you’ve already found out the hard way that it’s too low.
Fortunately, there are a lot of ways for you to take this step successfully. Credit repair is possible, and it can happen relatively quickly in some situations, but it will also require diligence and focus so that you don’t wind up falling back down the score ladder once you make improvements. Wise Loan has worked with people from all walks of financial life, and we’d like to offer some ideas to consider if you want to improve your credit score consistently.
Pay Your Bills On Time
The number one, top variable when it comes to how to improve your credit score is, no matter what’s happened in the past, to start to pay your bills on time every month. This is critical, and frankly no other effort is really that worthwhile if you’re going to be regularly racking up negative entries on your credit history because of late payments. It’s extremely difficult to overcome a series of negative entries in this regard, as credit repair will only fix what’s already happened and not what continues to happen.
Check Your Report for Accuracy
The Federal Trade Commission did a study a few years ago that found that as many as 20 percent of Americans had at least one inaccurate entry on one of their credit reports. That matters to a lot of people, as one quick way to improve your credit score, is to make sure that you remove any inaccuracies. That means that, despite the fact that it may make you nervous, you’ll need to review your credit report carefully and challenge anything negative that you think shouldn’t be there.
Clean Up Your Late Payments and Accounts
If you’re suffering from financial problems, then it’s possible if not likely that you have at least one or two accounts that are currently past due. The longer those remain past due, the more harmful it’s going to be to you in the future. You will not really be able to improve your credit score appreciably until you take care of those past-due accounts by either paying them off or coming to some agreement with those creditors.
Pay Down Debt As You Can
Generally speaking, there is thought to be about a 30 percent threshold when it comes to credit utilization that consumers should not cross. That means, for example, that if you have $10,000 in available credit from credit cards, your debt should never exceed $3,000 or it could affect your credit score negatively. Therefore, if you find that you’ve used almost all of the credit you have available, do what you can to pay that down and create more room for yourself so that you can move back to the positive side of that marker.
Don’t Close Accounts
One way that people mistakenly believe that they can improve their credit score is to close the accounts that they’re not using. That’s certainly one way to avoid running up additional debt, as you won’t have those accounts available, but as mentioned above, lowering the amount of available credit in your file could actually hurt your credit score, particularly if you have any revolving debt on your record.
Overall, there are several ways for you to improve your credit score, but every situation is a bit different. If you need some help getting started, Wise Loan may be a resource for you to consider. Check out our installment that may help you organize your finances and get moving in the right direction, and we are happy to help you work through this situation together.