A bad credit score can affect you in many insidious ways, especially down the line in the future. Missing payments, making late payments, borrowing too frequently: all these can cause your credit score to go down. This will make future borrowing either extremely expensive or maybe even downright impossible. However, there are steps you can take to improve your bad credit.
Give It Time
Let’s be honest here; sometimes the only thing you can do is wait. Some large negatives on your credit report, such as a foreclosure or declaration of bankruptcy, cannot be removed from your credit report before its time is up. For instance, a bankruptcy stays on your credit report for around 7 years. If these are the issues bothering you, there is nothing you can do but wait it out. In the meantime, keep on building good credit by paying off your loans regularly and not maxing out your credit cards. By showing that you can be fiscally responsible, you increase your chances of getting the negatives removed sooner rather than later.
Fix Your Erroneous Credit Report
Credit report companies are notorious for allowing some pretty significant mistakes on their reports. Something has simple as having your name misspelled can wreak havoc on your life. This is why it is a pretty good idea to order your credit report once a year and go through it thoroughly. Check it for mistakes such as payment dates, loan details, old payments, erroneous defaults, and incorrect credit history. If you can get your report fixed up, you will usually see your credit score go up immediately. Always have your receipts well organised; this will allow you to provide supporting evidence to companies so that they can correct your report immediately.
Be Fiscally Responsible
If you want to fix your bad credit, start with fixing your bad money habits. If you are prone to missing payments because you forget about them, consider setting up an auto-debit system. This will automatically clear your bills without you having to manually initiate a transfer. If you have multiple loans to think about, you might benefit from consolidating all your debt into one debt consolidation loan. This makes it much simpler for you to repay your outstanding debt since now it is just one payment a month instead of many. In addition to these steps, the common advice of using common sense always applies. In other words, do not use your credit card irresponsibly. Do not spend more than you earn. Make your payments on time and in full. Things like these might appear to be unsexy but when the time comes, mundane things like these are what will give your credit score a much-needed boost. At the end of the day, this is the purpose of the credit score: to consider all the different variables and assign a score to each person that is representative of how creditworthy they are. Improve your financial habits, and you will see your credit score improve as well.