Your credit score is a representation of your money management ability. A credit score determines whether the credit holder or borrower will be capable of paying off the debt or not. A person with a good credit score is considered a low-risk borrower, and a person with a poor credit score is considered a high-risk borrower.
If you get marked as a high-risk borrower, you may face loan denial, less availability of a good house for rent, high interest rates, or many other things. You might be planning to take out a loan for buying a house, or a car, or land, or you might be searching for a good house for rent, or you might be searching for a good job. But unfortunately, if you are a poor credit holder with a low score, your plan will remain unsuccessful.
So, raise your score by following the right steps and reach your goals.
Why Credit Scores Matters
When you apply for a loan, or house for rent, or a job, the first thing lenders, landlords, or employers check about you before lending money is your credibility in paying off debts. If you have a low credit score you may face-
- High interest rates
- Low credit limits
- Loan rejections
- Denial of house rent from the landlords
- Less availability of good jobs
- Large security deposit
- Fewer financial opportunities
These things are connected to your daily life and career. That’s why your credit score matters.
What’s Hurting Your Score?
Before raising your score, the most important action is to know and identify the facts that are decreasing your credit score. Facts include-
- Late or missed payment. Your payment history carries 35% of your credit score. So, be careful about timely payments
- Using more than 30% of available credit.
- Failed to settle the credit by adding money
- Accounts in collections and charge-offs.
- Apply multiple times for credit within a short period of time.
- Short credit history
- Irrelevant errors or outdated information on the credit report
Even small mistakes, which you may not count as important facts, can reduce your score gradually.
The Ways of Raising Credit Score
It’s never too late if you start it from today. The best thing for you is that you can raise your score and build a strong credit just by following some steps. Let’s know what you can do.
- Avoid late payments or missed payment issues from today. If you can’t remember the day, set a reminder on your phone or start autopayment options.
- If you are struggling with money management, put aside the payment amount just after getting your salary.
- Stop using your credit more than 30%. Use 10% if possible. If you have already exceeded 30%, try to settle the amount.
- If you don’t have enough money to settle the debt, talk to creditors and request they pay a small amount of money as an installment. Sometimes they agree with borrowers. But you have to maintain consistency in payment.
- Avoid too many applications within a short period of time. It requires hard inquiries each time. You might be considered a high-risk borrower.
- Don’t close old accounts. Sometimes, creditors consider borrowers based on their long credit history, which has good payment records in the past.
- Stay updated by reviewing your credit report often to know if there are any errors or misinformation
Hire Professional if Your Need Help
Goals are never achieved on their own. You have to take action to achieve them. Rebuilding or boosting your score may feel like a hassle if you do it by yourself. You might be lost in the middle of the credit rebuilding process. In this situation, feel free to hire an expert who can boost your credit score by following all the processes with laws and regulations.
Whether you live in Florida, New Jersey, California, Pennsylvania, or Virginia, an experienced team of Great American Credit Repair will guide you in completing the credit rebuilding process with legal activities. Great American Credit Repair has been helping people fix their credit since 2008.