Having a good credit score is an essential part of navigating today’s financial world with grace. Whether you are looking to buy a car, buy a house, or start a business, your credit score is very important. If past mistakes have cut down your credit score, don’t lose heart — here are eight ways to get it back up.
1. Check for Accuracy
There are three primary credit reporting agencies: Experian, Equifax, and TransUnion. It is possible that your credit reports have mistakes, which is why it’s good to chem. You’re entitled to a free copy of your credit reports once a year. Take advantage of this and double-checked each of your reports to make sure everything is accurate.
2. Stay Organized
It is very important to stay organized with your bills and due dates. Use calendars, planners, or anything that helps you stay on track with payment due dates. Try to schedule your due dates around your paycheck schedule.
3. Fix Late Payments
Get yourself on the right track by setting up due date alerts with your bills. You can move payment due dates around through your lender’s website. Some credit card companies can be forgiving of a late payment if you have a record of on-time payments.
4. Avoid Collections
Make sure you do not miss a due date payment entirely. That will lead your account to be sent to collections, and that is where things get bad. The collection agency will leave a bad mark on your credit report. This mark can last for seven years. If your account does get sent to a collection agency, you may be able to negotiate to avoid a bad mark on your credit report (The Balance).
5. Don’t Close Old Accounts
Your credit history is a major factor in many credit scores. You will risk shortening the length of your credit history by closing your oldest credit cards. Closing an account can lower your total available credit.
6. Pay Down Debt
Lenders like to know that you’re not borrowing more than you can afford to pay back, so it is important that when they check your credit, you don’t have too much debt. This makes it look like you have more debt than you have income, and a high debt-to-income ratio is a major factor in a poor credit score (Lift Credit).
7. Get a Consolidation Loan
A consolidation loan allows consumers to pay off other debts. This leaves you having one account to pay rather than many. If you are too far in debt, this can help pull you out.
8. Don’t Lose Heart
It can all get frustrating at times, and sometimes it may seem like there is no way to recover, but there is always a way. Stay motivated and think about how good you will feel when your credit score is flying high.