bad Credit

Have bad credit? Here’s what you can do to help fix it

Have bad credit? Here’s what you can do to help fix it
Written by Publishing Team

Adverse credit is a great starting point for financial struggles. Here’s how to fight the good fight and fix bad credit — before it hurts your money. (iStock)

It is no secret that bad credit can severely hamper an individual’s financial experience. The worse the credit score, the worse the experience.

“Bad credit is generally anything below 650, although this can certainly fluctuate depending on credit usage,” said Alex Miller, founder of UpgradedPoints.com, a digital platform that provides financial advice to travelers. “Specifically, bad credit can lead to higher interest rates, less money up front on loans, credit card denials, and a more difficult time completing everyday transactions, such as buying a car, getting a mortgage, or other routine tasks. It can lead to Even to job rejections for jobs that check credit history.”

However, this does not have to be the case, not when bad credit reform is a highly viable proposition.

“There are no shortcuts to fixing a bad credit score, but like many things it can be done with hard work and diligence,” said Matthew Jaffe, certified financial planner at Corbett Road Wealth Management, in McLean, Virginia.

If your goal is to improve your credit score, consider following these steps:

  1. Check your credit score
  2. Pay off any debts in case of collection
  3. Consolidate your debt
  4. Get less than 30% of credit usage
  5. Use the credit monitoring tool
  6. Dispute an error on your credit report

Not sure where you fit in the credit score range? Then you should start using a credit monitoring service to track changes in your credit score. Reliability can be counted on setup with today’s free service.

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1. Check your credit score

The first step to fixing bad credit is to visit Annualcreditreport.com where you can get a free credit report. “Reports are updated weekly, and they are free,” said Clint Lutz, President of TrackStar.ai, a forecasting API for the financial sector.

2. Pay off any debts in case of collection

Financial consumers looking to repair their credit should enter repayment mode. Debt in collections should be a priority, because it makes a difference in credit reports.

“We all know a group is bad, but if someone with a bad credit card would reward that group today and it was from an emergency room visit three years ago, the ‘last activity date’ on the credit report will be updated from three years ago to today,” Lutz said. . “This move is absolutely guaranteed to significantly reduce the credit score.”

3. Consolidate your debt

Another step to start improving your credit score is to consolidate some or all of your debts. “Many banks, credit card companies, and other lenders would love to consolidate their debt with their own company and potentially give you an incentive to do so,” Jaffe said. “For example, some will offer you 0% interest on that debt for a specified period of time (eg for six, 12 or 18 months).”

Visiting Credibility can help you compare debt consolidation options to find the best personal loan rates for you, based on your credit score and credit history.

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4. Get less than 30% of credit usage

If a consumer has lines of credit where more than 30% of the limit is used up, which is called the use of credit, start paying it off as quickly as possible. “Credit use accounts for 30% of a credit score and can be one of the fastest ways to raise a credit score,” Lutz said.

5. Use a credit monitoring tool

The benefits of using a credit monitoring tool are numerous.

“First, they offer continuous monitoring of all three credit reports, with real-time alerts and notifications of any changes,” said Nicole Cobain, founder of Strategic Deforce Advisor, a New York-based financial services firm. “A credit monitoring company can report identity theft issues and may even be able to offer identity insurance to cover the expenses required to recover your identity. The reports are especially useful if you are trying to improve your credit score because they will show the direct impact of a particular action or inaction on Your credit score.”

Consumers should know that some credit monitoring companies charge a monthly fee ($10 to $12 is a common fee range). And some providers, such as major credit rating agencies and some lenders (credit card providers, in particular), will offer credit monitoring for free.

If you’re considering credit monitoring, check out Credible. With our credit monitoring service, you can get instant alerts about late payments, fraudulent activities, credit score changes, and more. Check out some of our Credible partners here.

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6. Dispute an error on your credit report

Detecting and fixing errors on your credit report can also help financial consumers boost their credit scores. “In order to check the accuracy of your credit reports, start by getting copies of your credit reports from the three credit bureaus: Experian, TransUnion, and Equifax,” Cobain said. “It will be easier to collect this information if you use a credit monitoring tool.”

If you find an error on your credit report, contact the credit reporting company by certified mail or online via the company’s website or mobile app.

Additionally, if you find any items or accounts on your credit report that you don’t remember opening, you could be a victim of identity theft. Immediately notify your bank, credit card companies, and all lenders.”

Your credit score is usually one of the first things lenders look at when considering a loan. To ensure that you keep up with your credit status, sign up for a credit monitoring service. Credibility can help you get started.

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Have a question related to financing, but don’t know who to ask? Email Certified Money Expert at moneyexpert@credible.com and your question may be answered by Credible in our Money Expert column.

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