Are you thinking of getting your credit life on the right track? Rebuilding the bad credit into good is the ideal thing to do!
A poor score can wrench up your financial life, making it difficult, thus putting you in a frustrating mood. Moreover, it lessens your chances of getting loans at lower interest rates.
There’s so much you have to suffer in terms of benefits and rewards because of your bad credit score.
But, on the other hand, the one with good credit gets to enjoy endless rewards, low-interest loans, and better insurance rates.
No need to be sulking reading this because, oh wait, you belong to the unfortunate bad scorers.
We are here to help! This guide is made entirely to guide you through the steps to improve your credit score. Don’t worry. They are as easy to follow as it is to spend money.
Disclaimer: We have also included 7 things that you should avoid for a better score, and a FAQ section at the end to summarize your queries.
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Before moving on to the steps you can take for a fast rebuild of the score, you need to know why you should be doing that in the first place.
Like, what could go wrong even if you keep your credit at initial levels? Is a good credit score that important?
First of all, yes! And, second of all, YES! YES! YES!
No matter how you ask it, the answer is always going to be a big yes. Your credit score is equivalent to how lenders see you regarding spending habits and paying your balance.
Experian explains that a good credit score can unveil the road to endless rewards and benefits. Here is a little breakdown of why you need to improve your credit:
And so much more! These are only the basics you get as a good credit scorer. Let’s find out how you can benefit from these and other rewards.
5 Easy Steps To Rebuild Your CreditImage Credits: Freepik
To improve your credit score, you need to know which credit score range it falls in.
And, once you fully understand your credit range, you can take the necessary measurements to make it better.
Here are some easy steps you can take to raise your credit score:
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Rebuilding credit becomes way more manageable if you ditch the typical cards and get a secured credit card.
Firstly, they allow you to be the owner even with a bad score. And, secondly, you can always stay free of the fear of losing money.
Moreover, the annual maintenance fee is usually less and affordable with a minimum deposit value.
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Secured Card Vs. Unsecured Card: Which To Choose? According to CNBC’s report, people with low to no credit score should opt for a secured credit card to have some financial freedom. While, if you have a good score, an unsecured card might be equally beneficial. |
If you’re struggling with keeping your score up to the mark, become an authorized user. Wondering how you can do that? It’s pretty easy:
Getting registered as an authorized user on your friend’s or family member’s card can help improve your score.
The nerdwallet explains how an approved user status allows you to be shown in their credit reports. Simply ask them to add you to the good payment history list to get the maximum benefits.
Tip you should not miss: Remember to choose a friend or family member whose credit score falls into the good credit range.
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Payment history is undoubtedly the crucial factor that determines the fate of your credit score.
According to Forbes, it roughly counts 35% of your credit score. So, you really can’t afford to have a bad payment history.
Therefore, maintaining your payment history is a must if you want to have good credit.
Yes, you have heard it so many times. Of course, you must have read it in all those credit improving tips blogs.
But, the reason it is mentioned everywhere is because of it’s significance.
Underpayments can hurt your score, late payments leave a negative effect on your credit, and not to mention all those surprise bills you have to pay.
Honestly, even a single misplaced amount can really hurt your overall credit rebuilding.
Exceeding your credit limit should never be an option. And, to avoid increasing the balance, the 30% credit utilization rule comes to the rescue.
In fact, a low credit utilization ratio is more like a guideline and less like a rule.
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30% Credit Utilization Ratio; Hit Or Miss? The lower the credit utilization ratio, the better it is for your credit score! - Rod Griffin (Experian) |
Bonus: Click to read a detailed study by creditkarma on how to fix your high credit utilization ratio. Thank us later! Hehe.
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You’ve got the answer to why you should focus on rebuilding your score. You have already read the steps to take and tips to follow to do so.
Now, what comes next?
Credit hurting things to avoid! Only if you know what is actually leaving a bad impact on your score can you get long-term results.
Or else, you might have to redo every credit rebuilding step from the start.
Disputing the credit errors, checking credit reports, paying bills on time, increasing the credit limit, setting payment alerts, and keeping the credit utilization ratio low - are some easy-to-follow steps for rebuilding credit.
Even if you want to increase your credit score quickly, it’s not a one-night process. In fact, it may take 11 to 18 months to really see a noticeable change in your overall score. Still, it can only get better if you take the initial step.
Sadly, you can’t witness the improved credit miracle overnight. To rebuild your credit score fast, you have to work on your spending habits, payment history, and a good debt image.
Rebuilding your credit card can help you in achieving your financial goals. However, doing so might be more challenging than it sounds.
Not on our watch!
To motivate you to combat the credit rebuilding ghost, we have mentioned 5 steps you can take with some easy-to-follow tips.
Surely, these simple tips and tricks will aid you in rebuilding your credit score quickly and faster.
If you want to read more such helpful content, make sure to follow the Tuesday-tip blog series.
Of course, if you want to add anything, feel free to play your part!