You can “repair” your credit score!

What is this „credit score” in fact? Do you even know what credit score you have? If you are not familiar with this topic, you should definitely change it. You are probably even not aware how much you can lose having a low credit score.

Why is this score so important? Just because it monitors your financial behaviors: all money you borrow and pay back. It is the representation of your financial responsibility and creditworthiness. For instance, there may happen a situation in which you will not be accepted for a dream post, because your potential employer have checked your score and, as it is low, you no longer seem reliable enough. It is also the area of interest of landlords, banks or other institutions. This is the sad truth – the credit score demands your knowledge and effort to maintain it on the high level. Luckily, it is really worthwhile.

Here is what you need to do to help your score go up:

1. Do not use all your credit up.

Your credit card balances should remain below 30 percent. You have a $10,000 limit? Do not exceed
$3,000 in your spending. Your whole credit cards debt is going to be divided by all your credit limits and this will provide the result for your “Credit utilization” – one of the main parts of your credit score. However, you should know that not using any of your credit is not recommended here as well.

2. Do not close your “ill” card.

Repair it, not close. Bring a regular bill (like autopayments) to it and fix the situation. It is better to keep your cards and use them sensibly to show that you are a reliable and punctual payer.

3. Avoid closing the old accounts.

15 percent of your score comes from the length of your credit history. It is calculated by taking the average of your credits’ lengths. That is why, you should keep your credit card open as long as possible.

4. Be punctual with your payments.

This is the most important factor for your credit score – payment history is 35 percent of it. It is going to be checked how many times you missed your payment, how much it was, how long was the delay and how long ago. If you’ve missed a payment for the first time, pay it immediately and contact your bank to explain the situation – in this way you can avoid consequences for your credit score.

How much impact do negative marks have on your credit score?

5. Spend only as much as you will be able to pay off by the end of a month.

If you know that you will not pay the large amount in the next 30 days, do not be attracted by your bank’s minimum payment option. Just spend money responsibly – it will help your credit score and budget at the same time. Interest rates can be really high in such cases.

6. Do not pay off all your loans too quickly.

When you are a responsible borrower, many types of loans mixed can do your credit score a real good.

7. Feel free to open new accounts.

Do not owe plenty of money on a numerous cards – such a situation is not well seen by agencies. But if you are afraid that applying for some new credit will damage your score, you are wrong.

8. Find help.

You can try to find support. If you do not feel competent enough, consider using a free credit- monitoring service. Check out Credit Karma – it will keep you up to date.

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