Good credit is key to your financial freedom! Since Credit Unions, members and the local community support each other towards financial success, here are some tips for ensuring you can keep or return to a healthy credit score.
There is no simple, one-size fits all method of repairing bad credit – It takes time and an eye for details. Beware of any claims to improve your credit score in an instant. These quick-fix efforts are more likely to backfire. The best advice for improving credit is to manage your finances and use your credit responsibly. If you have forgotten to make the occasional payment or have serious issues meeting your financial obligations, then you need to repair your credit history before you can see credit score improvement.
3 Ways to Start Fixing Your Credit Score
Review Your Credit Reports: Repairing your credit score begins with reviewing your credit report. Request a free copy of your credit report from your financial institution or non-profit organization and check it for errors. Your credit report contains the data used to calculate your score and it may contain errors – incorrect SSNs, non-reported payment histories and out-dated charge-offs will affect your score. If you find errors on any of your reports, dispute them with the credit bureau and reporting agency.
Reduce the Amount of Debt You Owe: Your debt-to-income ratio is an essential part of the credit score calculation process. Credit cards and lenders want to see that you are not maxing out your credit limits so that you have little or no room to leverage your money. Reducing the amount that you owe is going to be a far more satisfying achievement than improving your credit score.
- Try to stop using your credit cards until you’ve paid down the balances.
- Use your credit report to make a list of all of your accounts and then check recent statements to determine how much you owe on each account and what interest rate they are charging you.
- Design a debt reduction plan which puts most of your available budget for debt payments towards the highest interest cards first, while maintaining minimum payments on your other accounts.
Set up Automatic Payments or Reminders: Paying back your loans on time biggest impact on your credit score. Many banks offer payment reminders so you never forget when a payment is due. You may also want to set up automatic payments with your bills, loans and credit cards Some automatic payment programs only cover the minimum balance owed, while others offer excellent discounts for ensuring payments are made on time. Ask your Credit Union experts or credit counselors if automatic payments are right for your situation.
Only time can make negative information in your report go away. Reputable credit counseling organizations or your trusted Credit Union advisor can offer detail measures to manage your debts and help you develop a budget to fit your lifestyle. Don’t Wait – develop a customized plan to repair your credit and solve your personal debt crisis.