Sometimes good people have to contend with the bad experiences brought on by credit blemishes. These often include exorbitant interest rates or loan refusals on the home or car of your dreams. While credit blemishes can be embarrassing they are not fatal. There are things that you can do to improve your credit and make yourself the type of candidate that creditors give the thumbs up.
1.Review your credit reports for any errors or outdated information.
Take action to correct any mistakes and then ask for additional copies of your reports to be sure that the corrections are reflected on your report.
2.Avoid scenarios that seem too good to be true.
It can be tempting, “your credit cleaned up for only 99.95.” These and similar offers clean nothing except your wallet of the cash inside. There are no quick fixes for improving your credit history and score. Generally, entries remain on your report for 7-10 years. Paying money to a scam artist will not remove these negative entries, only time will. In rare instances you may be able to write to the vendor that submitted the negative entry and ask that it be removed. You have the best chance with this strategy if the account is still open and you can demonstrate that the blemish was the result of an isolated incident rather than a pattern of behavior.
3.Pay all current accounts on time.
Payments of even one day late are reflected on your credit report. You can improve your chances of paying on time if you simplify the process. Strategies you might use include online payments, having the vendor send email reminder, paying bills as soon as you receive them or setting up a bill payment organization system to avoid misplacing any bills, statements or envelopes.
4.Apply for a secured credit card.
If you don’t have any credit at all you can begin again with a low limit secured credit card. Be sure that the creditor you choose reports regularly to the credit bureau, and of course, always pay on time.
5.Use only a small portion of your current credit limits.
Credit card balances that teeter close to the limit suggest out of control spending or overextension. Avoid giving that impression by charging no more than 30% of your total available credit at one time.
6.Refrain from initiating excessive inquiries.
Credit inquiries, usually prompted by applications for credit can damage your credit score if they happen too frequently.
7.Pay down balances and keep accounts open.
Closing accounts that are paid off can seem like a good idea, but it isn’t always. When you close accounts you reduce the amount of credit available to you, which can have a negative impact on your credit score. If you have the discipline keep these accounts open making only small charges that you pay off in full each month.
8.Make and stick to a budget.
The best way to improve your credit is to take control of your finances. Financial planning isn’t just for the rich, it’s for everyone; and as the saying goes, “when you fail to plan, you plan to fail.”
It can seem overwhelming to face a credit report marked by blemishes. Don’t be discouraged, you can re-establish your credit with time and patience.