Getting rid of that bad credit score is something every person and family wants to do. You never know when you might need that future loan to buy that new car, or to send your children to college, and a bad credit score could ruin those plans. To fix your credit score, you want to improve it by changing your credit and spending habits first, but you also need to focus on credit building habits that the credit bureaus will see since they are the ones who issue FICO scores. The following ways can improve your credit fairly effectively.
Changing Your Budgeting Strategy And Where You Spend Money
One of the first ways to improve your credit score is to cut the debt you already have and make sure your family is with you on it. This can include cutting unneeded expenses such as cable TV, golf club memberships, and even just eating out all the time. Focus on getting cheaper alternatives to what you buy such as getting clothing and furniture from cheaper thrift store locations, going on less expensive vacations, and even buying cheaper food brands and cooking at home more often. Debt can be eliminated just by staying within your current income or increasing that income, and only spending on needs and not luxuries.
Knowing whether or not you’re living within your means can take a little time of sitting down and going through your bank statements. You may also want to use a budgeting app to track what you’re doing with your money. But most importantly, communicate what you’re looking to do with your money with your family so they understand.
Keep Your Credit Card Balance Paid Way Down
Your credit score isn’t only affected if you miss payments or accumulate interest on your credit card. If you use too much of your credit limit and don’t keep the balance paid down enough, your credit utilization ratio will also hurt your credit score. It’s often recommended to pay down your credit card balance to zero or close to it at least twice a month so that when reports are issued to the credit bureaus, they can see that you’re making payments and not always running the balance up. If need be, you might consider asking your credit card provider to raise your limit so you don’t always have a high credit utilization ratio. It’s important to use your credit card to build credit, but you might want to avoid using it for expenses that run high on your available limit.
Use An Alternative Emergency Loan For Hardships
Sometimes you get hit with emergencies where you have to suddenly find cash in a hurry to fix them. Maybe this includes water damage to your home, or a sudden doctor’s visit you or someone in your family has to take. While you should have savings and be willing to ask friends or family for help in these situations, if you don’t have either of those options, online payday loans for bad credit individuals might help. These loans can help you in the short-term and don’t come with the tough approval systems that banks usually use. You just need to remember that payday loans are intended to be paid off quickly.
Get Credit Reporting Errors Fixed On Your Credit Report
Sometimes issues that dock your FICO score several points are not your fault. Sometimes merchants have billing errors whenever they charge credit cards and get the wrong information put on the invoices they send to your credit card provider. Sometimes even the credit card provider makes errors in the statements they send to you or the credit bureaus. That’s why you get to request a free credit report every year from the three bureaus to make sure everything on it is accurate. If there are incorrect charges listed on it, you can contact the bureau or merchant who put them on there and get them resolved. On occasion you may need the help of a third party to do this.
The bottom line is resolving your credit score issues usually aren’t that difficult provided you know how to make sure the credit bureaus can see your activities. It also never hurts to take a finance and budgeting course if you need a little extra help budgeting and improving credit.
