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5 Must-Know Tips To Repair Bad Credit

Illustration for article titled 5 Must-Know Tips To Repair Bad Credit

Have you finally got your eyes on your dream house or car? Well, that’s good. All of us have our own dreams that we hope to fulfil - car, house, business, property, etc. Things don’t always end up the way we want it, though. It’s kind of frustrating when you have set your mind on buying what you want or need and then suddenly, life takes a left turn, then you fail to do what you hoped for. Right then and there, you got flushed after hearing that you got rejected due to bad credit. Truly, it’s disappointing.

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If you’ve got a bad credit rating, it’s likely that you’ve got too many overdue debts that were recorded as ‘payment defaults’ on your credit report. Looking on the bright side, though, bad credit can be fixed. There’s no need to feel embarrassed or ashamed. Just pick yourself up and work on the following tips to repair your bad credit.

Check Credit Report For Errors

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First off, request for a copy of your credit reports. Errors on your credit report have a negative impact on your score that’s why t’s important that you pay attention to it closely. Double-check the history to guarantee that there are no late payments incorrectly listed for any of your accounts and that the credit limits for each of your open accounts are correct. Be sure to check for errors, report any that you’ve noticed and file for a dispute with the credit reporting agencies or credit providers.

Pay Bills On Time

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Paying your bills on time is of the utmost importance. Remember, you will not be in this situation if it hadn’t been negligent of your due dates before. So, this time make sure to change to paying habits. Recent good payment patterns that show up on your credit report will have a positive impact on your credit score as time passes by. There are apps that automate payments that you can take advantage of to avoid being late on your dues.

Clear Up Any Debt Defaults

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Debt defaults hurt your credit score. Once you’ve made a payment default, they indicate your inability to make timely repayments. Defaults stay on your report for five years even if you pay off the original debt but that doesn’t entail that you skip it. If you are having issues with it, don’t hesitate to ask assistance from your credit provider to help you make ends meet.

Reduce Other debts

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Okay, this is crucial. Decreasing your percentage of available credit used can make a quick and significant impact on your credit score. If you really need your credit score to improve, then, it’s time that you pay off your outstanding balances. It might be tough to pull off as a short-term action to increase your credit score, but it should be part of your long-term financial plan. In the long run, you won’t have to pay as much interest as you do now.

Use Credit Card Responsibly

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Opening a new credit card account should only be done when needed. Creating too many hard inquiries on your credit report or rapid increases in your credit limits can look risky if you are a new credit user. In addition, you must not close unused credit cards. It is not a smart strategy since it may increase your credit utilization ratio. A few open accounts but owing the same amount can negatively impact your credit score.

Thoughts To Ponder

There’s nothing to be ashamed of having bad credit. It’s something that you can work on and eventually achieve a better credit score. Just remember that it takes time and patience - not an overnight success. Certainly, you already know by now that it is essential to your overall financial well-being, hence, it’s wise to do everything you can to ensure yours are as good as possible. Start building a better debt payment habit today!

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