Credit Repair Guide
If you’ve not been able to secure a loan, credit card, or mortgage, there are higher chances that you require credit repair. This is a clear indication that your credit report has some negative entries that impact your credit score. However, regardless of your current situation, you must consider credit repair. There are many reasons which you need to repair your credit other than securing loans and credit cards as follows:
a. Get low insurance premiums
There’s a direct link between your credit score and insurance premiums. Whether you want a home, life, or car insurance and your credit history is poor, the insurance provider will charge you more.
b. Get favorable interest
If you have a low credit score, there are higher chances that you’ll be charged more interest. If you consider repairing your credit, you’ll have increased chances of getting low-interest rates on the money you borrow.
c. Increased credit limit
If you keep on paying your bills promptly, your creditworthiness is usually not in doubt. This means that creditors will have confidence in you and will end up giving you high credit limits.
d. Avoid making cash payments only
You won’t get a credit card quickly if your credit history is poor. This means that every time you’re making a purchase, you’ll have to pay using cash. To avoid this, credit repair is essential.
e. Avoid deposit payments
Most telecommunication and utility service providers nowadays check credit reports before offering services to access the risk involved. Therefore, to prevent people from defaulting, they advise them to deposit a certain amount of money. If you pay your utility bills timely, this deposit is given back to you. Having a good credit score prevents you from being subjected to these deposit payments.
f. Purchase a home
If you’re planning to purchase a new home, it’s essential to repair your credit. If your credit score is poor, most financial institutions won’t give you a mortgage. Additionally, if you’re lucky to get one, then be ready to pay very high interest.
g. You’ll avoid frequent calls from collection agencies
When it comes to credit repair, it’s essential to clear all debts, including those with collection agencies. This will help you to avoid their frequent calls, messages, emails, and letters.
These are some top reasons why it’s essential to repair your credit.
Credit repair guide
Having poor credit means that you’ll be losing many opportunities all along. However, the best part is that you can actually repair your credit. Below is a credit repair guide:
1. Understand where you are
The first step in repairing your credit is to understand exactly where you stand at the moment. This can be done by contacting credit bureaus and asking for your whole credit report. After getting your credit report, take time to analyze and see your position. If your credit score is very low, you should start the process of repairing it.
2. Timely utility payments
It’s essential to make all your utility payments on time to repair your credit. Late payment hurts your credit score. To have a good credit score, you shouldn’t pay timely for some months and stop. You must maintain consistency every month.
3. Cut down your monthly expenditure
One way of repairing your credit is ensuring that you don’t spend a lot of money. To properly repair your credit, you should avoid unnecessary credit applications and also pay your bills early in advance. Therefore, to stay on your budget, you must spend less and not more than you get each month. Ensure you understand your net income each month and lessen your expenses. The number of expenses should not exceed the amount of money you earn. You should have a limit on your spending habits by avoiding impulse purchases. This way, you’ll repair your credit quickly because you won’t be involved in recurring debts that are unsettled.
4. Check for any past due accounts
It’s possible for you to have a zero balance in your credit report but still have a poor credit report due to the presence of past due accounts. Your credit history also plays a significant role in determining your credit score. If you’ve cleared all your debts, you should go a step further to ensure all the past due accounts are closed. By any means, if you find a charged-off account, then you’re even in a worse situation. You should call your creditor immediately, especially if the debt hasn’t reached 180days for immediate repair. However, this can only be done on full repayment. If the debt is huge, some creditors will even waive penalties. They’ll also give you a flexible repayment plan if you’re not in a position to clear the debt entirely at once.
5. Look for possible errors
Sometimes, your credit score might be low by mistake, where you start wondering, and you’ve been paying your bills on time every time. In this case, the problem might have arisen due to possible errors. You should thoroughly check your credit report for any mistakes, although they’re not familiar. If you find some errors, take time to clean them and ensure the information is accurate. Some of the common errors in credit reports arise on your social security number, address, and name. When checking for possible errors, go through each page and check all purchases you’ve made, loan and credit card debts. Anything suspicious should be reported immediately to the credit bureau for correction. However, you must have valid evidence to support your case.
6. Apply for new credit
Immediately after you sort out all adverse issues on your credit, you should consider applying for new credit so that you can show some commitment that will help you gain some additional positive entries. After applying for new credit, it’s essential to make timely payments depending on your creditor’s agreement. This way, you’ll start improving your credit score. You should necessarily apply for huge loan facilities or mortgages. Look for credit that you can manage to pay without necessarily straining yourself too much. Open a new account elsewhere and show your commitment, thereby making timely payments, and you’ll be good to go.
In conclusion, these are some of the top ways to repair your credit. Credit repair isn’t hard provided that you learn how to do it and acquire the required financial discipline.