Thursday, February 7, 2013

Top Ten Tips to Quickly Fix Your Credit

Improving your credit can seem like an uphill battle, especially if your credit score has taken a few hits due to things like late credit card payments, defaulted student loans, or persistently high balances on your accounts. However, with steady adherence to the following tips, your credit will be on the road to recovery.

Understand how credit works
This can be tricky for even long-time credit users. It is important to understand how various factors impact your score. You can find a lot of great information on credit basics here.

Request a copy of your credit report
In the United States there are three consumer credit reporting companies: Equifax, Experian, and Transunion, which likely contain a credit file affecting your credit score. You can request a free credit report from each of the three agencies one time per 12 month period from

Dispute any incorrect items on your credit reports
Review the three credit reports and make notes of all items that you suspect have been reported in error.  You will need to contact the creditor or company listed on the report and the credit bureau whose report contains the error to submit a dispute. They are required to investigate the error in a timely manner. Keep in mind that you may need to dispute the items in writing. Make sure to always keep copies of the documents you submit for your record.

Negotiate with creditors
For debt that you legitimately owe, you should attempt to negotiate a settlement or a payment arrangement. Creditors may be willing to remove negative information from your credit report completely once the owed balance is paid in full.

Reduce your balances
Pay down the balances of your existing credit card accounts. It is imperative to always make at least the minimum payment by the due date. Ideally, pay the full balance due each month.

Open a credit card
If you do not already have an open credit card, opening one can be helpful. This is an easy way to establish an account in which you can demonstrate your credit-worthiness by using it responsibly. If you do not qualify for a traditional credit card, you may consider applying for a secured credit card.

Make a budget and stick to it
Make a list of all of your household expenses and your income. When you know how much disposable income you have left over every month, make a commitment to pay a certain percentage of that toward your balances and/or negative items on your credit report.

Don’t close your credit cards
Closing credit cards can have a negative effect on your credit as it reduces the amount of available credit that you have. The amount of available credit you have is one factor of your credit score.

Cut up your credit cards
You can cut up your credit cards without closing the accounts. This is important if you find it difficult to abstain from using them. You would still technically have the credit line associated with the card available to you, but not having the card handy can help to eliminate any impulsive purchases.

Get current on your student loans
There are rehabilitation programs available to you if you have student loans in default status. If you have multiple student loans through multiple lenders you might consider consolidating them so you can make one monthly payment which can feel more manageable.

Last, but certainly not least. Although it may seem counter-intuitive and perhaps impossible to save when you’re primarily trying to pay your balances down, it is extremely important. You need to have a fund that is only used for emergencies. This will help eliminate the need to use your credit cards.

The reason behind why people want to fix their credit varies greatly. However, 3 out of 4 people that reach out to me are undertaking this challenge in hopes of qualifying for a new vehicle purchase. There is a definitive guide to vehicle financing that was recently published by an authority called World Car Auto Group. It is in their Nissan Finance section.

Are your finances in order?
How can you be more proactive in managing your funds?

SimplyLili is a PhD student in Social Psychology and an avid blogger. Her main goal is to bring awareness to issues that warrant social responsibility and action. She is a self-proclaimed nerd and her 3 fave things are cheesecake, rainy days, and pugs.


Post a Comment