3 Ways to Repair Your Credit

by Nick on September 17, 2014

3 Ways to Repair Your CreditThe American dream is one so that any person can do anything they want if they try hard enough and apply themselves.

So what happens when you wake up covered in flour and realize that your credit stinks?

(Yes, that sentence was solely for the purpose of including this picture in the post. I just HAD to use it. So there you go. A forced connection…)

Well… there’s a lot you can do.  Here are 3 thoughts on the topic.

1. Just start doing postive things from today on.

The best thing you can do is change your habits moving forward.  Pay every bill and pay it on time. If you don’t have the money, work odd jobs and odd hours.  Sell stuff.  Hustle.  It takes a long time to recover from even one late or missed payment. Above all of your bills, keep your credit cards and loans paid and on time.

2. Scour your report. Your true score may be higher than you think.

Inspect your credit report for errors. Be sure to look for accounts that you have closed being listed as open, late payments that were actually on time, or any other error. If you find an error, write a letter to the credit bureau and include any proof that you have such as receipts or letters from the creditor.

If that happens your score could go up quickly.

3. Stop opening new accounts, consider slowly and carefully closing newer existing ones, but consider your credit utilization ratio.

I know, I know… closing accounts can damage your history.  But you’ll get way more out of doing things well than trying to game the system.

Too much credit can also scare off lenders with how much you could potentially spend in a short period of time.  And new credit inquiries tell people you’re trying to borrow more money and drop your score too.

So if you’re trying to improve your credit score to restructure your existing debt to lower interest loans, having a lot of available credit could act as another barrier and applying for new cards or loans can work against you.

So how do you strike a good balance? Consider closing some newer accounts as you pay down your debt to keep a low ratio of credit utilization and not have a ton of available credit compared to your income!

This one is truly a delicate balance. But if you’re looking to move forward with a conservative credit plan, it’s be one to consider.

So there you have it. 3 Ways to Repair Your Credit.

It’s not get rich quick, although #2 might show a quick bump.  🙂

Before you begin on your journey to repair your credit, take some time to work out a strategy for your future. Set goals to repair your credit and cut your spending where you can. You need to regulate your borrowing and financing in order to avoid getting knocked down on your credit again.

The bad news is you are in this mess.  The good news is you can get out of it.

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