According to data from the Corporation for Enterprise Development (CFED), 56 percent of American consumers have credit scores that are rated “fair” or “poor.” Consumer with low credit scores are often required to pay much higher interest rates for loans and credit cards and higher premiums for insurance. They may also be disqualified for certain types of job and housing opportunities. Keeping your credit score as high as possible is very important in today’s society. If you have already damaged your credit, you can fix bad credit fast with these simple tips.
Put Away The Credit Cards
You will never be able to eliminate your credit card debt if you continue placing charges on your credit cards. Instead, limit yourself to the funds from your paycheck for your monthly spending. If you find it difficult to handle all of your expenses with the money from your paycheck, you are living beyond your means and need to find ways to reduce your spending quickly to avoid financial devastation.
Pay Down Your Credit Card Balance
Once you have gotten your spending under control, start focusing on paying down your credit card balances. A big part of your credit score calculation is the ratio of the amount of credit available to you to the amount of credit you are currently using. If all of your credit card balances are close to the limit, then your credit score will be much lower than if your balances were nearly paid off. Put the credit card payments into your monthly budget and pay as much as you can each month until the balances are paid off.
Make All Of Your Bill Payments On Time
If you are trying to fix bad credit fast, the last thing you want to do is anything that prevents your credit score from rising. Paying all of your bills on time is a big part of that formula. Paying a bill late or missing a payment completely will cause a considerable drop in your credit score and the negative mark will remain on your credit report for years. To ensure that all of your bill payments are being made on time, consider using the automatic bill payment features available on your bank’s online portal.
Review Your Credit Report For Errors
Finding and fixing errors on your credit report can help you fix bad credit fast by giving your credit score an immediate boost. It is estimated that nearly a quarter of consumer credit reports contain some type of error that brings down the credit score of the consumer. Anyone can get one free copy of their credit report from each of the three major credit monitoring companies from www.annualcreditreport.com. Review each of them for accounts you did not open, missed payments that you can dispute, and personal information that is incorrect.
Do Not Apply For New Credit Cards
While it may be tempting to open new store credit cards at the checkout to earn an immediate discount on your purchases, don’t do it if you are trying to repair your credit. Each time your credit report is pulled for a credit inquiry, points are deducted from your credit score. While your credit score will eventually regain these points, it can hurt your credit score for a short term.