If you are wondering how to fix your credit score, your credit probably falls into one of three categories. Either you have no credit, bad credit or too much credit.
All three situations can be very frustrating and you may feel like there is no solution. Fortunately, no matter what your situation, there is an answer to your question “How can I fix my credit score?”
How to Fix Your Credit Score if You Have No Credit
Having no credit can feel almost as frustrating as having bad credit. No one wants to take a chance on you because you don’t have a track record of paying credit on time. You can’t get a track record because no one wants to give you a chance.
The good news is that even if you have had problems in the past getting credit, there are things you can do to help fix credit score situation.
One of the easiest ways to get credit when you don’t have any is a secured credit card. Unlike a prepaid credit card, a secured card will help restore your credit. You will make a deposit to a credit card company and they will issue you a credit limit in that amount. Many companies offer programs that allow you to convert your account to unsecured within 12 months as long as you make your payments on time. Just be sure that that card you select reports to the credit bureaus or the card will offer no benefit to fixing credit score.
Another option can be to get a CD loan with your local bank. This can be a great way to both reestablish credit and to establish a good banking relationship.
Other alternatives can be department store cards and gas cards. Because these cards are offered by merchants who want you to use their services, their underwriting guidelines tend to be more lenient than a traditional Visa or MasterCard.
Fixing Credit Scores with Bad Credit
If you have bad credit, you may be surprised to learn that one of the best things to do is to get new positive credit added to your credit file. You should consider the strategies discussed above to begin the credit restoration process.
You will also want to get a copy of your credit bureaus. Check your Credit Report and Score – Fast, Free & Easy at CreditReport.com.
Examine all three credit bureaus carefully and determine any errors or questionable accounts you would like to have removed.
Then, from your list of errors, determine the two that you think would have the greatest impact on your credit score. Create a dispute letter, and send it to the three credit bureaus.
Once you initiate a dispute, the credit bureaus will contact the creditors and require them to verify the negative history that they are reporting on your bureaus. If they fail to prove this negative history within 30 days, the items will be removed from your credit report. You will want to continue disputing slowly until all of the items on your list have been removed.
How to Fix Your Credit Score if You Have Too Much Credit
Being over-burdened with debt is a stressful situation that no one wants to be in. One possible solution is to try to get a loan to consolidate all of your debt and lower your payment. Bad credit consolidation can be a challenge, but it can be done.
Ideally, you only want to look at loans that will also lower your interest rate, otherwise a lower payment will just mean that you will stay in debt longer. Because of the way interest is calculated, it is a good idea to look for a simple interest installment loan.
Another option to consider is transferring high interest credit cards to ones with low introductory rates. You should only employ this strategy if you are serious about getting out of debt and are going to use this introductory period to pay off as much debt as possible. It is not a recommended strategy if you lack discipline and may use the additional access to credit to get yourself further into debt.
Credit counseling or debt management are options that you want to consider as a last resort. Both have their place, but you need to understand that entering into credit counseling or settling debt for less than the full balance will have a very negative impact on your credit score.
Whatever your situation, you should never give up hope. Plenty of people have been in the same situation you are and come out on the other side.
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