Three Tips On Repairing Your Bad Credit And Increasing Your Credit Score
If you are looking to finance a new car or perhaps qualify for a mortgage, you know that your credit score will be an important factor. It can mean the difference between a high-interest rate or one that is more affordable. In some circumstances, it can mean the difference between qualifying for a loan and being denied one. If your credit is less than perfect, there are certain ways you can improve your credit score. The following are three of the best strategies.
Pay down your debt
There are several factors that make up your credit score, and one of them is your debt to available credit ratio. The more debt you have, the lower this ratio will be, and this will lower your credit score. However, if you pay down a credit card to zero, make sure you don't close the account. An open account with a zero balance will increase your debt to available credit ratio. Closing the account will not help much. This is not always possible with certain types of types of debt, such as a car loan, but it is possible with revolving accounts like credit cards, so focus your efforts in this area.
Make your payments on time
This is an overlooked but big factor in what determines your credit score. If you have had trouble paying your bills on time, then develop the discipline to do so. Once you begin to pay your bills every month on time, your credit score will begin to rise. Of course, this is a long-term strategy, but if you are looking to buy a home, it is often something you can do while you as you save for a down payment, and get other aspects of your personal finances in order.
Hire a credit repair company
Bad marks on your credit report will have a profound effect on your credit score. This is the reason why you need to look at your credit report. Sometimes there are mistakes that you can have removed. This will improve your credit rating quickly. But bad marks on your credit that are not mistakes can often be removed by the company that placed them on your report. Credit score repair companies often have experience talking to credit companies, and they can sometimes have a mark removed.
Paying down debt and making your payments on time are both long-term strategies while hiring a credit repair company is more of a short-term strategy. If you have time, it is often best to do all three. Start with short-term credit repair to see how much your score can be improved, and then adopt long-term strategies for a further increase in your credit scores.