April 13, 2017
Having bad credit can be a real hinderance in your life. It can result in being called by debt collectors, getting bad interest rates on things like home or car loans, and it can make it difficult to open other lines of credit for items you truly need. While it’s relatively easy to make a few mistakes and see your credit score take a plunge, it’s harder to work off that bad credit and make your scores good again. However, it can be done. To show you how, here are three ways you can start improving your bad credit.
Find Out What You’re Working With
The first thing you’re going to want to be in order to battle back the bad credit you’ve accumulated is to know the type of credit you’re actually working with. If you know you’ve missed payments or have debts that are large or outstanding, it’s probably safe to assume your credit score isn’t great. But until you know for sure, you can’t know how much damage you need to try to reverse. MyFICO.com recommends getting your credit score and checking the history for accuracy. If something is wrong, you can dispute it, which could help your score. And once you finally see what you actually have going on, you can make a plan to fix it.
One of the biggest reasons people start to see their credit slipping, apart from not having the money to afford their payments, is that they don’t have a system that helps them remember when, how, or where to make their payments each month. To combat this, Kali Geldis, a contributor to Credit.com, suggests setting up payment alerts each month that will remind you when you have bills due. This will allow you to ensure that your payments get made on time and that you can begin creating a habit of paying off your debts rather than letting them grow over time. Payment reminders will also help you not to forget paying a bill simply because it slipped your mind this month.
Leave Old Or Good Debt On Your Credit History
Once you starting getting your credit score gradually improving, you may be tempted to get all the debt possible off of your credit history, thinking that this will make your score go up. However, according to Dana Dratch, a contributor to BankRate.com, old debt that you’ve effectively paid off will actually prove that you have a good track record of handling debt, helping your credit score rather than hurting it. Knowing this, be sure you’re careful what debt you try to get removed from your credit history and what debt you keep on there.
If you have bad credit and are looking to improve it, use the tips mentioned above to help you on that journey starting today.