How To Improve Your Bad Credit Score
Credit is an important piece of many financial decisions that you’ll have to make in your life, so having a bad credit score has the potential to have a major impact. When you want to make a big purchase or even apply for a job, the last thing you want is a bad credit score holding you back.
If you have a bad credit score, there are things you can do to help it along. Improving your credit score is not an overnight thing and depending on how bad it is, it may take a bit of time to get a good rating. The important thing is to stick to your financial plan and work towards the goal of improving your score.
Keep reading for our best tips on how to improve bad credit scores today!
Why Your Credit Score Is Important
In order to commit to a plan to improve bad credit, you need to know why having good credit is so important in the first place.
Your credit score will be checked for countless large financial purchases and important scenarios that you’ll make in your life including getting approval for auto loans, mortgages, and even applying for certain jobs or apartment rentals.
Any establishment that is going to loan you a sum of money that you’ll be responsible for repaying will take a long, hard look at your credit score to determine your creditworthiness. Your credit score tells the story of how much money you owe and how reliable you are at paying it back.
A bad credit score tells creditors and employers to steer clear of you, whereas a good credit score will make them feel much more comfortable extending you a sum of money. If you are planning to make any large purchases like a home or a car anytime soon, it’s time to improve bad credit scores today.
Defining A Bad Credit Score
Credit scores are a numerical value between 300 and 850. Your score is made up of how much open debt you have, how old that debt is, and how reliable you have been paying off that debt.
Creditors report your payment history to the three main credit bureaus, Equifax, TransUnion, and Experian. When potential creditors “pull” your credit score to determine if you are worthy of extending a loan, they will get all their information from those credit bureaus.
Generally, bad credit is considered any score below 600. Fair or good credit is determined as anything from 600-850. This is not to say that you can’t get a loan with a score below 600, but it might be harder to obtain and your interest rate may be significantly higher.
Ways To Improve Your Credit Score
1. Pay Off Debt
When you want to improve bad credit, one of the fastest ways to do it is to pay off as much debt as you can.
There are many ways to do this including the debt snowball and debt avalanche methods. The best way to start is to list out all of the debt you have with the minimum monthly payments and figure out how much extra you can contribute to those payments to pay off the debt sooner.
2. Prepaid Credit Cards
When you have bad credit, chances are most credit card companies won’t approve you for a credit card. This can be frustrating, but the good news is there is a way to get a prepaid credit card to improve bad credit.
Most major banks will allow you to open a prepaid credit card that you fund with your own money. You fund the card and as you spend it, you are responsible for paying it (yourself) back. This is a great way to build credit and get used to being more responsible with credit cards because it’s your own money.
3. Dispute Negative Remarks
It’s important to check your full credit report at least every month to make sure there is nothing on there that is inaccurate or fraudulent.
These things can have major negative impacts on your credit for years to come if you don’t catch it and dispute it quickly. If you notice anything on your credit report that doesn’t look right, dispute it right away so that the credit bureaus can review and remove it from your report if necessary.
4. Consolidate Debt
If you need money quickly, consider a bad credit title loan to help consolidate your debt.
You can easily apply on titleandpaydayloans.com to see if you qualify for a loan with one of their direct lenders. Typically, these types of loans have lower approval thresholds so they are a great option for someone trying to rebuild credit.
Get Started Today
These four tactics are a great way to start working to improve bad credit. A bad credit title loan is the quickest and easiest way to get you the money you need to start working towards a good credit score.
With a title loan from titleandpaydayloans.com, you can get access to the money you need in an emergency without having to worry about your credit. In fact, responsibly repaying your bad credit title loan can actually improve your credit score over time.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
