What’s your credit score?
In 2020, the new average FICO score reached an all-time high of 710 in America. Why? It could be because a lot of Americans have been spending less during the pandemic, while also paying their credit card bills on time.
However, even though 710 is a great milestone for Americans to reach, it’s far from the best. If you want to take your credit score to the next level, and beyond, this article’s for you. We’ll review vital credit repair advice to help you achieve financial security, so you can build a bright future for yourself.
Read on to learn the best credit score tips to fix your credit, fast.
Start Paying on Time
The first thing we recommend doing is to begin paying your current bills on time. Before you start tackling past debts, take the necessary measures to keep up with your finances today. However, simply paying your utility bill or other house expenses won’t be enough. Instead, you need to pay bills to organizations that will report your payments to the credit bureau.
To achieve this, we suggest opening up a new credit card strictly for paying bills. Be vigilant to pay off the credit card on time, each month, and watch as your credit soars!
Make a Budget
If you’re struggling financially, opening up a new line of credit to pay bills can be a dangerous move. It’ll be tempting to overspend, especially when the expenses are things you truly need. To help avoid setting yourself back by overspending, you’ll need to create a strict budget and stick with it.
One of the best ways to create a budget is by getting a copy of your bank statement. Looking at the bank statement, write down all of the bills you see debits for such as car insurance, and phone bills.
Next, calculate the total amount you’re spending at the grocery store each month. You should start charging the monthly bills to the credit card. However, you can continue using your bank account to cover grocery, gas, and house needs. Finally, set a limit for your grocery, gas, and house needs and stick to it.
Credit Repair Company
Moving on, one of the best ways to improve your financial situation is by meeting with an advisor. We suggest reaching out to a reputable credit repair company and asking them to assess your situation. However, steer clear of any companies that request payment before getting your information.
Instead, the best credit consulting companies will be able to offer you a free consultation. During your consultation, you’ll be able to learn all of the services available to you, so you can create a customized credit plan.
Lastly, look for a repair company that offers credit score help with some type of cancellation policy in place. A cancellation policy means you can stop working with the company at any time, for whatever reason.
Create a Debt Snowball
Another powerful credit repair technique is to create a debt snowball. To do this, you’ll need to create a list of all your debts. Next, arrange the debts on your list in order of smallest to largest. Every month, pay the minimum amount you owe for each balance, except for the smallest one.
The smallest debt is something you should be putting as much money towards as possible. However, be sure you’re not stressing out your current finances in the process. Instead, reference your budget, and look for any extra cash you can find to put towards the smallest debt. After paying off the smallest debt on the list, use the same process for the next smallest debt.
Continue this method of paying of aggressively paying off the smallest debt. Before you know it, you’ll be at the top of your list, tackling the biggest debt on your record.
Remember earlier how we mentioned using credit cards to pay off your bills? You can take that method one step further by making multiple payments each month. While making frequent payments alone isn’t enough to raise your credit score, it can help in the long run. Typically, when you pay frequently you’re able to keep your credit card balances low.
When you have consistently low credit card balances it lowers your utilization rate, which is a good thing. Your utilization ratio is one of the most important factors in creating your credit score.
Don’t Close Old Credit Cards
If you’re not using your credit cards, you might be tempted to close them out. However, hold off on doing that. When you close a credit card that still has a balance, it’ll appear as if you maxed out the spending limit. As a result, your credit score can go down.
What about credit cards that don’t have a balance?
Closing out an old credit card you’re not using can still harm your credit score. Why? When you close the old credit card you shorten the average of your credit age. Lenders tend to shy away from working with people who have short credit histories.
Repair Credit With Disputes
Last, on our list of credit help tips, let’s talk about disputing any incorrect information that appears on your credit report. After identifying an error in your credit report, you’ll need to contact the credit reporting company. For instance, if the error appears on an Experian report, you’d need to reach out to Experian directly.
We suggest writing a detailed letter that outlines the information you believe is wrong. Next, provide documents with your letter that show the error, such as a copy of your credit report. Finally, mail the dispute letter using certified mail.
Raise Your Credit Score
As you can see, if your credit score isn’t where you want it to be there’s a lot you can do about it. However, before you can start paying off debts, or opening new lines of credit, the first step is to make a budget. Once you have a strong budget in place, you can reach out to a credit repair company to set up your free consultation.
It won’t happen overnight, but with time, and consistent effort, you can have an excellent credit score. Are you ready to learn more tips like these? Explore the rest of this site!