Bad credit can have catastrophic effects on your finances. A low score can keep you from buying a car, getting a mortgage, or even getting a job. There are no two ways; fixing a low credit score is essential to restoring your good reputation. How long does it take to fix bad credit? What’s the best way to repair credit? Please read carefully to find out.
Dispute errors in your credit report
Outdated or incorrect entries on your credit report can have a significant negative impact on your score. Apply to the credit bureau for these items to have them removed. The three main credit bureaus are Transunion, Experian and Equifax. Contact those who contain the error and do so in writing so you have a written record. As stated by the Federal Trade Commission (FTC), agencies have 30 to 45 days to confirm the information is valid or it must be removed from records.
Make sure your payments are on time
Pay off what you owe on your credit account each month. Every time you pay on time, you create a positive story and improve your score. Conversely, missing payments can cause your score to drop dramatically. Timely payments will help your score increase little by little. Over time, your late payment will have less impact on your credit score. An increase in your FICO score indicates that although you have had problems in the past, you have been working hard to overcome them.
Set up automatic payments and recurring payment reminders
Almost all credit card companies allow you to set up automatic credit card payments. This way you can make sure you never miss a payment again. Log in to your credit card account and go to the payments section. Enter your bank details and set the date you want the payment to be debited from your account. Set it to “recurring payments” so you don’t have to worry about missing a payment. You can decide if you want to pay the minimum monthly amount or pay off the balance.
Sign up for Experian Boost
Experian Boost is an excellent program that allows users to include their utility bills on their credit report. Utility bills aren’t usually included on credit reports, so adding them can help you improve your score right away. The program is completely free to join, and it does affect the scores of people with poor credit histories as well as those with low scores.
Keep your balance as close to zero as possible
When you lower your credit card balance, your credit score will improve significantly. Credit bureaus would prefer to see a balance below 30 percent utilization, Experian said. This means your credit card balance should be 30% or less of your total credit limit. Keeping your balance below the 30% threshold is fine, but keeping your balance as close to zero as possible is even better.
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