What To Know About Fixing Bad Credit
Fixing bad credit is something that takes time, patience, and discipline. You have to know how to check your credit report and dispute any errors, manage the lines of credit that you have, and pay off any debts.
If you can get the hang of these things, your road to fixing bad credit will be much easier.
How To Start Fixing Your Credit
Get Your Credit Report
The first thing that you need to do in order to fix your bad credit score is to get a copy of your credit report. You are entitled to a free copy of your credit report every year from each of the three major credit reporting bureaus: Experian, Equifax, and TransUnion.
While your credit report should compile most of the same information at every credit bureau, they do not necessarily all get the same information. This is why you need to get a copy of your credit report from all three bureaus to get the most accurate picture of your credit situation.
Check For Errors
One of the main reasons why you need to get a copy of your credit report is so that you can check it for errors. Mistakes can be made, and identities can sometimes be stolen. This means that not everything printed on your credit report is always accurate.
Dispute Any Inaccuracies
If you see inaccurate information, it is important that you dispute it with your credit bureau immediately. This inaccurate information can drag your credit score down. Disputing inaccurate information helps you get it off of your credit report, which brings your credit score up.
Pay Off Any Overdue Credit
You need to pay off any late account balances that you have. One of the things you need to know about fixing bad credit is that your history of making payments on time is the single most important factor in your credit score.
If you have any accounts that have been sent to collections, this will have a severe negative impact on your credit score and you need to take care of this as soon as you possibly can.
Have a Diverse Mix of Credit Types
Another thing you need to know about fixing bad credit is that it is good to have a mix of several different types of credit. Having multiple types of credit on your credit report helps lenders see that you are someone who is able to manage their credit responsibly.
While you want to have several types of credit, you also want to be careful about opening too many new lines of credit too quickly. This will lower the average age of your accounts, which will hurt your credit score.
Leave Your Old Accounts Open
Likewise, you do not want to close your old accounts. The average age of each line of credit that you have is an important factor in calculating your credit score. By keeping your old credit cards open, you keep the average age of your credit accounts high.
This is one of the most important parts of fixing bad credit because the average age of your credit accounts makes up 15% of your total FICO credit score.
Always Pay Your Balance on Time
You need to make sure that you always pay your balance on time. Your history of making on-time payments is the single biggest part of fixing bad credit. This history makes up 35% of your total FICO credit score.
It always takes time, discipline, and patience, but making all of your payments on time is one of the most important things that you can do for your financial health.
Getting Help with a Bad Credit Payday Loan
Fixing bad credit is something that will take time and patience. Things like bankruptcy, collections, and missed payments can stay on your credit report for up to seven years. In the meantime, you might find yourself in a tight situation where you need to borrow money to cover some sort of emergency expense.
When this happens, one of your options is to apply for a bad credit payday loan with Carolina Payday Loans, Inc. This is a way that you can get the emergency cash you need regardless of whether you have good, bad, or nonexistent credit.
Carolina Payday Loans, Inc. Advantages
- You can get quickly approved for up to $550
- You can apply with good, bad, and nonexistent credit
- There are convenient locations near you
- You can get the same day cash you need
Fixing bad credit is not easy but it is one of the most important things that you can do to improve your financial health. It will take hard work and patience, but you should get started today.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.