Being aware of your credit score is far more relevant than it used to be. In our youthful years many of us find ourselves spending far beyond our means, accumulating debt and interest faster than our pay packets increase. This damage to your credit rating can always be undone though – after the huge spike in credit lending pre-recession, many people are left feeling that repairing their credit score is impossible. Not true! There are several ways to repair your poor credit rating that you may not even know about. Read on for my list of 9 Ways to Repair Your Credit Score.
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1. The Status of Your Accounts
The first thing you have to do when wishing to repair your credit rating is to read your credit report. Once you have paid off all of your debts, your rating should change to “satisfied” or “settled” rather than “unpaid” or “delinquent”.
2. Speak to Your Creditors
If you are unhappy with the way that a credit lender has branded your credit borrowing history, speak to them. Ask for them to remove all information about the account borrowing from your credit report after it has been paid off in full. They should be able to change your status to “paid as agreed”.
Frequently asked questions
3. Obtain a Department Store Card
You need to start boosting your credit lending history to demonstrate that you can borrow money responsibly. A way that you can start to turn around your credit rating and repair your credit score is to borrow sensibly on a department store card, paying off any balance every month. Always make sure that you are borrowing within your means, or else you will further damage your rating.
4. Slowly Close Accounts
If you close every account you do not need at once, your credit rating will nose-dive. What you need to do is slowly close them – no more than four a year, spaced out evenly. You should also keep the older accounts active but with no debt, which shows that you are responsible and will help repair your credit score.
5. Start Saving
Open a savings account and deposit some money every month on a regular basis. This can usually be done through automated systems through your bank, which will save you from having to do it manually yourself. The money that is saved can be used to cover any unexpected bills rather than having to get into any debt.
6. Obtain a Secured Credit Card
A way that you can repair your credit score regardless of your current situation is to get a secured credit card. If you borrow reasonably and pay back at least the minimum amount due you will find that you can demonstrate responsibility.
7. Clear Outstanding Debt
All loans, whether owed rent or a student loan you took out to help you through college, that are unpaid will hinder your rating. By paying them off you will notice that more credit lenders will be prepared to lend you money.
8. Stay Clear of Payday Loans
Far too many people think that a payday loan is a quick and easy way for them to pay off some debt, without considering the further implications of the loan. The high APR rates and penalties that you face for missed payments highly outweigh any benefit to you, so try to avoid them at all costs. If you take out one over your lifetime then it’s not a huge deal, as long as you can pay them back.
9. Join a Credit Union
Although not everyone is eligible to do so, a way to help to repair your credit score is to join a credit union. They will make sure that you can qualify for more loans and help you to make payments on time, as well as offering additional support to organize your debt.
I hope that my list of 9 Ways to Repair Your Credit Score has been helpful. One thing that you should remember is that it’s never too late to repair your credit rating, and that nobody should be discouraged from doing so. If you have any experience and would like to share your story about credit repair, please do leave a comment for us all to read.
Top Photo Credit: efollia.com
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