Repairing bad credit takes time and there is no quick way to fix a credit score, so beware of any business that claims to improve your credit score fast, it will most likely backfire on you. “Fixing” a credit score is more about fixing errors in your credit history (if they exist) and then setting a budget to pay off your debt. Raising your scores after a poor mark on your report or building credit for the first time will take patience and discipline.
3 Important Things To Do:
1. Request a free copy of your credit report and check it for errors.
- Request you FREE copy of your credit report. Check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct.
- If you find errors on your Experian, Equifax, or TransUnion report be sure to dispute the error with the credit bureau.
- Note that it’s OK to request and check your own credit report without lowering your FICO score. As long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.
2. Make your credit payments on time.
This is one of the biggest contributing factors to your credit scores. Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO Scores. If you have missed payments, get current and stay current.
- Setup Payment Reminders – your online bank should offer alerts or reminders where they can send you an email or text message reminding you when a credit card payment is due.
- A lesser option, is for you to enrol to have your credit card or loan provider automatically debit the minimum payment due from your bank account.
3. Stop using your credit cards
- The first thing you need to do is stop using your credit cards and reduce the amount of debt you owe
- Use your credit report to make a list of all of your accounts.
- Check your recent online or paper statements to determine how much you owe on each account and what interest rate they are charging you.
- Come up with a payment plan. Determine how much you have in your budget each month to pay off your debts. Pay most of your available budget towards the cards with the highest interest rate first, at the same time you should pay the minimum payment due (or more) on your other accounts.
When will my FICO score improve?
- The longer the period that you pay your bills on time after being late, the more your FICO Scores should increase.
- The impact of past credit problems on your FICO Scores fades as time passes and as recent good payment patterns show up on your credit report.
- Paying off a collection account will not remove it from your credit report, it will stay on there for seven years.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
This won’t rebuild your credit score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO Scores.
- Don’t close unused credit cards as a short-term strategy to raise your scores.
- Don’t open new credit cards just to try and increase your available credit. This could backfire and actually lower your credit scores.
- If you are a new credit user and have been managing your credit for just a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your scores if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.