Here’s How You Can Get Your Credit Score Back On Track
Having a low credit score can cost you big bucks as mortgages and auto loans charge you a higher interest rate if your credit score is poor. However, there are ways to get your credit score back on track. These include:
Lower Your Credit Utilization Rate
Credit utilization rate is the amount you owe on a credit card compared to your credit limit. A higher credit utilization rate contributes to a poor credit score. For instance, if your credit limit is $10,000, and your balance is $3,000, your credit utilization rate will be 30%. It’s suggested that you keep your credit utilization rate under 30%. Your ultimate goal should be to clear off all your credit card debt to maintain your credit utilization rate at 0%.
Remove Negative Items From Your Credit Report
It’s common for a credit report to contain errors, and these discrepancies can damage your credit score.
After checking your credit report, you can start getting the negative items removed. You can use CreditRepair.com for this.
Pay Your Bills On Time
If you want to improve your credit score, don’t miss a single bill payment. Late bill payments can stay on your credit report for up to 7 years. Most bills allow you to use autopay, using which the merchant can automatically take the bill payment out of your account. Autopay saves you the trouble of having to remember to pay your bills every month, ensuring you don’t miss your payments.
Maintain Your Score
Your credit score includes your total amount of debt, payment history, hard inquiries, credit utilization rate, and account history. Credit scores are generally classified as poor (300-579), fair to good (580-720), and very good to excellent (720-850). Once your credit score increases, you must maintain it between 720 and 850.
Keep Track Of Your Credit Score
If you’re trying to improve your credit score, it’s important to monitor your progress. You can check your credit score as many times as you want without causing any damage to it.
Checking your score once every couple of months keeps you motivated and lets you know what’s helping in moving your score forward.
Creating a game plan (paying attention to bill payments, checking your credit score, and figuring out how to improve it) is another way to get your credit score back on track.