Bad credit can cause you a great deal of stress and prevent you from getting a loan when you really need it. However, the good news is, that it is never too late to start improving your credit history. While improving your credit score does take time, there are some things you can do right now to improve your credit history. Here are some things that you can do immediately.
Before you can fix your credit, you need to know what areas you need to work on so it is important that your get your credit report from all 3 agencies Experian, Equafax and TransUnion. Once you get your reports you need to go through each report and see if there are errors on your report and if so, then you need to dispute those errors.
If necessary get professional help disputing these errors because correcting these errors will help improve your credit history almost immediately.
One way to improve your credit history is to pay all your bills on time. This includes your rent, utilities, credit cards, car loans, or any other bill that you have. If you have bills that are late bring those bill up to date as soon as possible.
While late payment of bills negatively affects your credit, but the more time that passes the less impact those late bills will have after you bring those bills back up to date.
If you have been paying all of your utility bills and cell phone bills on time, then you can use these on time payments to improve your credit score. Just sign up for Experian Boost, which allows Experian to connect to your bank accounts to identify utility and telecom payment history. This can help to improve your credit score.
If you have loans or other debts paying them off on time or slightly before they are due will show that you can make your loan payments and make them on time. It also decreases the amount of money you owe which is good for credit history.
Credit cards and lines of credit have limits that they set. Making sure that you keep your charges low and Do not max out your credit cards or your line of credit. When it comes to credit cards try to only charge the amount that you can pay off each month so you Do not carry over any debt.
If you are maxing out your credit cards or lines of credit Credit report agencies, see this as a problem. So make sure that you keep those balances as low as possible.
If you have older credit cards that you no longer use you may be tempted to close out those unused credit cards, however if these cards do not require an annual fee it is best to keep those credit cards open. Why? Because if you owe any money on any other accounts and close out those credit cards you will still owe the same amount of money, but will have less available credit, which could negatively affect your credit score.
Every time you apply for a credit card this creates what is known as a hard inquiry on your credit report which can negatively affect your credit, especially if there are too many hard inquiries in a short period of time. A hard inquiry remains on this report for 2 years so be careful applying for new credit cards just to increase your line of credit.
If you have a poor credit history and Do not have any credit cards or anything other than utilities and rent on which to start showing that you can make timely payments, applying for a small loan or a small limit credit card and paying it off promptly may actually help you to rebuild your credit.
If you have poor credit, getting any type of loan through a lending institution may be impossible. Without having some type of loan or a credit card, which allows you to show you can make payments on time may make it more difficult to rebuild your credit.
Payday loans are specifically designed to help people who have poor credit and if used right can be helpful in rebuilding your credit, because these loans only show up as a short term loan on your credit report and not a payday loan. (which indicates poor credit to many lenders).
However, you need to use a payday loan properly in order for you to use it to improve your credit history.
Do not use a payday loan to rebuild your credit more than 3 times in 2 years since taking out too many loans of any size may impact your credit more negatively than positively.
You can combine using a payday loan and a secured credit card to rebuild your credit. However, you do need to take care to never use all the credit available on the credit card and pay off the charges each month.
Do keep in mind that it takes time and effort to rebuild your credit history, but it can be done with a little determination and careful budgeting.