Credit has the ability to affect nearly every major decision and purchase in your life – cars, homes, costly living expenses. The difference between good credit and bad credit is thousands of dollars out of your pocket. Bad credit, unfortunately, is easy to come by. Late payments and high balances due to unforeseen circumstances have very negative effects.
There is hope, though. Here are some things you can do to help improve your credit score:
- Know your credit score – This seems obvious, but many people are clueless to what their credit score actually is. This can be how your credit score comes to be low in the first place. Get a credit report and keep tabs on it.
- Dispute errors in your report – If there are false statements about late payments on your credit report, dispute them. It’s your right and a reported late payment can take a bigger toll on your credit score than you think.
- Avoid new credit card purchases – If you are having trouble making the minimum payment on your credit card, or if you are only able to make the minimum payment on your credit card, STOP using your credit card. Pay cash, or don’t make the purchase and use that money to pay off some of your credit card.
- Pay off past-due balances – The further you are on your payments the worse it affects your credit score. The last thing you want is to have your payments sent off to a collection agency. Talk to your credit card issuer about your missed payments. They may be willing to re-age your account so your credit report shows your account has always been paid on time.
- Don’t apply for more credit cards – As long as you are trying to repair your credit, don’t apply for any more credit cards. Even inquires that get turned down can hurt your score. Opening a new credit account also lowers your average credit age, another action that hurts your credit score.
We’ll be back next week with part 2. Do you have questions about your credit? Let us know on Twitter (our Facebook page is down for the moment…)