Whether you like it or not, your credit score can determine how easy or how difficult it is to buy a car, buy a house, get cell phone service, or even get a job. A bad credit score can negatively impact just about every area of your life. Sometimes, a bad credit score can result from events entirely out of your control such as illness, disability, or from the loss of a job. Other times a poor credit score results from poor decisions, such as late or missed payments or overuse of credit cards. But there are ways to help you get back on track and raise your credit score. Here are a few:
- Pay your bills on time. Sounds simple but there are a lot of people who simply forget to pay their bills before they’re due. Unfortunately, there are repercussions for those that consistently forget. Consistency matters.
- If you can’t pay your bills on time, contact the creditor. Forgetfulness aside, there may be times when you can’t pay your bills on time. If that does happen, contact your creditors immediately and let them know. It may not always prevent them from reporting the late payment, but many creditors would rather work with you than report you.
- Try to pay down any outstanding debt. Even if you have been making payments on time, credit bureaus don’t look kindly on a large amount of debt. That means paying down balances and keeping them low.
- Only use your credit card if you can pay off the balance at month end. While credit bureaus want you to have credit, they also want you to keep your balances low.
- Try not to apply for multiple credit cards or other lines of credit in a short period of time. Each time you apply for credit, a hard inquiry is placed on your credit report. If that is done multiple times over a short period of time, your score will drop.
- Don’t close your credit card accounts. Even if you don’t use them, keep them open. The available balance will help your debt to ratio percentage, keeping your score higher. Conversely, if you close an account, your credit score is likely to drop.
- Review your credit report periodically. This is probably one of the most important things you can do. Like any of us, credit bureaus can make errors, but you won’t know about them unless you review your report regularly. If you do find an error, all three credit bureaus give you the opportunity to dispute the amount. Don’t wait until you’re turned down for credit to look at your report. Do it now.
- Try to avoid filing for bankruptcy if at all possible. A bankruptcy filing will stay on your credit report for up to ten years. Keep in mind that chronically late payments on your report aren’t any better than a bankruptcy filing, so if you have to file, just be aware of the impact it will have.
Remember, your credit score will follow you throughout life. Do your best to maintain it properly.
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