It’s no secret that having good credit is important. A high credit score means you’re a low-risk borrower, which can result in lower interest rates on car loans, mortgages, and other types of debt. And if your credit score isn’t so great? It can be difficult (and expensive) to get approved for a loan or line of credit.
But don’t worry – there are steps you can take to improve your credit score.
In this post, IVA Plan shares 10 simple tips that will help you repair your credit and increase your credit score.
Through Individual Voluntary Arrangements and other solutions, IVA helps struggling individuals get their finances back on track and beat debt once and for all.
Follow these tips and you’ll be on your way to better financial health!
Know your credit score and credit history.
This is the first step to repairing your credit. Get a free credit report from annualcreditreport.com and check your credit score. Review your credit history carefully to identify any errors or inaccuracies.
Create a budget and stick to it.
Once you know where you stand financially, you can begin to make a plan to improve your credit score. Part of that plan should be creating a budget and sticking to it. When you’re able to stick to a budget, it shows creditors that you’re capable of managing your finances responsibly.
Pay your bills on time, every time.
One of the biggest factors in your credit score is your payment history. Creditors want to see that you’re capable of paying your bills on time, every time. So, make it a priority to pay all of your bills on time, every month.
Use credit wisely.
It’s important to use credit wisely, which means using it only when needed and not maxing out credit cards. Using credit responsibly establishes you as a low-risk borrower, which is attractive to creditors. Additionally, keeping credit utilization low also helps improve credit scores. Therefore, using credit wisely is not only smart for your financial wellbeing, but it can also help improve your credit score.
Keep balances low on credit cards and other ‘revolving credit.’
Your credit utilization, which is the amount of credit you’re using compared to the amount of credit you have available, makes up 30% of your credit score. So, it’s important to keep your balances low on credit cards and other revolving credit accounts.
Pay off debt rather than moving it around.
If you have debt that you’re struggling to pay off, don’t fall into the trap of moving it around to different credit cards. This will only make your situation worse and could lead to more debt and a lower credit score.
Avoid opening too many new credit accounts in a short period of time.
When you’re trying to improve your credit score, it’s important to avoid opening too many new credit accounts in a short period of time. This can be a red flag for creditors, and it can signal that you’re in financial trouble. Instead, focus on using the credit accounts you already have. Make sure you make your payments on time, and keep your balances low.
Don’t close old credit card accounts.
One mistake that people often make is closing old credit card accounts. This can actually hurt your credit score because it lowers your credit utilization ratio. So, even if you don’t use an old credit card, it’s best to keep it open.
Dispute errors on your credit report.
If you find errors on your credit report, it’s important to dispute them. You can do this by contacting the credit bureau directly. Be sure to include any supporting documentation that you have to back up your dispute.
Monitor your credit report regularly.
Monitoring your credit report on a regular basis is one of the best things you can do to repair your credit. By keeping an eye on your credit report, you can catch errors and inaccuracies early on. This will help you to avoid making any mistakes that could hurt your credit score.
By following these simple steps, you can repair your credit and improve your credit score. Just remember to be patient and consistent, and you’ll see results in no time.
