Simply miss a couple of credit card payments or fall behind on your mortgage, and your credit score will fall faster than a skydiver. Getting those credit scores back up, however, is a time-consuming process that can take years if you don’t know the ins and outs of the system.
Although the fastest way to repair your credit is to work with one of the best credit repair companies, there are a few relatively simple steps you can take to boost your score a bit more quickly.
Manage How Much Credit You’re Using
Just because you pay your bills on time doesn’t automatically mean you have a great credit score. The credit reporting bureaus in America have various metrics they use to evaluate one’s credit, and timely payments are just one piece of the puzzle.
One factor that can lead to a low credit score is what percentage of your available credit you are using. For example, if you have a $10,000 credit limit on your credit card and you currently owe $9,600, the credit bureaus think you may be managing your money poorly.
One way to combat this is to have multiple credit cards open with a small balance on each of them. Beyond being irresponsible, maxing out cards can lead to high minimum payments that will have you paying down your debt for years to come. Once you’ve balanced out how much you’re using on each card, you can more easily raise your score.
Pay Off Collections
Many Americans have collections accounts on their credit reports and they don’t even know it. Everything from medical bills to a vindictive landlord that claims you damaged a property can be handed over to collections agencies, and the first thing most agencies will do is to place a notice on your credit report. Obviously, this doesn’t look good to lenders.
Paying off these collections is essential to getting your credit back on track. It shows lenders that even though a debt went to collections, you paid it as soon as possible, indicating you’re a responsible person who pays your debts.
Dispute Errors
Credit reports aren’t foolproof or 100% accurate. Mistakes happen all the time–a single wrong digit in a social security number can lead to debts of all kinds ending up on the wrong credit report. If you haven’t taken a look at your credit report lately, you might not even know something is wrong until you’re denied a loan that you were sure you could get approved for.
Whether it’s the voluntary repossession of a car you never signed for or a collections account for a service you never purchased, it’s essential to have these errors removed as quickly as possible.
Fortunately, there are licensed credit repair companies that can work on your behalf to speed up the process and have inaccuracies removed without you having to lift a finger. They have experienced attorneys and financial professionals on staff that know every trick in the book. If the debt is found to be illegitimate, it will be removed.
Looking Forward
Credit repair companies such as The Phenix Group can assist you by providing credit counseling and teaching you best practices far beyond what this article can convey. We can teach you things like the three Cs of credit as well as how to manage your money and credit more responsibly! With a qualified credit repair company on your side, raising your credit score will take weeks instead of years.