If you have a low credit score then you might benefit from looking for ways to improve it. There are ways to repair your credit but it will depend on the reason for the low score in the first place. If you see companies advertising that they can repair your score quickly and easily then think again before you sign any agreement. There are things that you can do but they will take time and they won’t be achieved in a few short weeks they can take months and even years to repair.
What Can Be On Your Credit File?
There are numerous items that will make up your credit file and it will depend what is on the file as to the length of time that it can legally stay there. An error should be removed as quickly as possible and this can mean that you need to contact the credit report company or the company that has put the wrong information on your file and you then ask them to remove it. If you ask the makers of the credit file they will need to confirm that the information is an error and this can take at least a month before it is removed.
If you have been declared bankrupt then it will stay on your file for 7 – 10 years and even after you are discharged you will still need to prove this in the form of your discharge papers.
This seems an odd expression but if you don’t build a file of good credit obtaining any sort of credit can become very difficult. Companies want to know that you are responsible with the credit that you have and that you are using it wisely. They are looking for repayments that are made on time and the minimum amount. Another area that is considered is the amount of money that you have available to you and the amount of money that you have already borrowed.
A target score of 740 is going to give you the best interest rates and access to the best products because you have a great score and are considered low risk.
The average person’s credit score in 2012 was just 690 and this means that many people are paying more for their credit than they need to. There are ways to repair your credit that will allow you to obtain better products in the future, but this process is going to take time.
Ways to Improve Your Score
- Payment alerts – It is possible to set up alerts that remind your when your payment is due, this will mean that you won’t pay your credit late, and this will mean no more late payment fees as well as a great credit report that you are a prompt payer.
- Updating details – spend some time with your bills and make sure that you know the date that they are due and the total amount of outstanding debt that you owe. Being organised will help you remember to be good with your credit.
- Lower the amount you owe – If you can reduce the amount of debt that you owe and aim to focus on paying your smallest debts of first, it will give you the incentive to carry on.
- Refrain from closing down accounts – It is important that you don’t close down accounts because if you owe a large amount of money and you have a high amount of available credit your score will be higher than if you have a high amount of credit and a lower amount available. The normal rule is not to use all the available credit and this can increase your credit score.
- Don’t open any new accounts – If you are trying to improve your credit score then don’t open any new accounts, each time you open an account it has a negative effect on your credit score and it will take even longer to improve.
These are just some of the ways to repair your credit.
Improving Your Credit Score
It is important to realise that your credit score is not going to improve over night and it can take many months’ even years to make an overall impact on your credit score so that you can get the benefit of lower interest rates when you take out new products.
It is about have patients and working in a positive way, even if your credit file has items that are not going to be easily removed it doesn’t mean that you shouldn’t be working towards the improved credit file. It will show that you have been working hard and this can have an impact on the products that you are offered, they might not be the best rates but they will be better than if you had not tried to improve them.
Every time you make a payment on time it has a positive impact on your credit file and as past payments can make up to 38% of your actual score it is important that you take your payments seriously and get them to the companies on time. There are easy ways to repair your credit, they just take time.