A bad credit score can lead to a whole host of problems, many of which have little to do with actually using credit. Nowadays, it’s become ordinary for landlords and employers to run credit checks on those applying to rent a home or find a job.
However, even if you have a terribly low credit score, there are a few ways that you can improve it relatively quickly. To start working on your score as fast as today, here are five simple steps worth taking:
1. Stop Overspending
While unforeseen emergencies can lead to a bad credit score, overspending and living beyond one’s means can also play a significant factor. If this is you, it’s time to get real and stop overspending, or you’ll never be able to achieve a stable credit score. If you can, stop making charges on your credit card all together so that you can work toward paying off a manageable amount of debt each month. It sounds simple, but it’s beneficial – stop spending, and start saving!
2. Never Let a Bill Go Unpaid
You may think you can get away with not paying bills, but you really can’t. An unpaid bill will eventually go into the hands of debt collection agencies, which will severely damage your credit score. A massive bill can, of course, seem intimidating but bear in mind that many bills (such as medical bills) can often be paid off in installments that make the burden of paying them back a little less severe. Ideally make paying bills on time a priority, as unpaid bills really will wreak havoc with your credit score.
3. Never Max Out Your Credit Card
Maxing out a credit card is bad news, as your interest rate may skyrocket along with your credit score. Avoid maxing out your card at all costs and try to keep your credit balance significantly lower (and ideally nowhere near) your card’s credit limit. Don’t sign up for additional credit cards just to pay off the charges you have on others, and only resort to using your card for big purchases when you need some emergency money and have no other way to get it.
4. Avoid Making Late Payments
Each month your credit card account will state how much is owed, and offer a minimum payment amount as well. Avoid not paying anything, as this will lead to late fees, increased interest rates and of course cause further damage to your credit score. Ideally, pay the total of your balance and if you cannot afford to do this at least pay the minimum.
5. Check Your Credit Report
Once you know your credit score, right or wrong, don’t stop there. Thoroughly read through the report to see what is affecting your score, as mistakes made by the credit bureau are much more widespread than many people think. Carefully analyze every claim and remark and if you find anything that you feel needs disputing, don’t be afraid to contact them yourself and discuss it. You never know, the error could be on their part, and once realized allow your score to jump up considerably.
Don’t let a bad credit score negatively affect your life – take action by following our steps today! Good luck!