A good credit score and a good financial standing will allow anyone to easily acquire new loans – mortgage, car, significant purchases etc – in the future. But it’s not at all times that we were able to pay off our debts. Some reasons can be financial crisis such as what this pandemic has caused the whole world. Another reason can be a bad behavior, mismanagement of finances or funds. There are many reasons why individuals are struggling to keep a good balance when it comes to finances and it often takes its toll on the credit score standing.
What are the side effects of a bad credit or a low credit score? Let me cite a few. First, it is very likely that your credit and loan applications may not be approved. No lender will trust someone who does not pay their credit on time. Second, you may be approved for a credit or a loan but the interest would be so high, and it would cost you more in the long run. Third, and we all don’t want this to happen – you might get denied for employment. There are certain jobs in the industry that require you to have a good credit history and your bad reputation can be a reason for the employer to turn you down.
If you have a bad credit history, can you still improve it? Can you still correct the mistakes you did in the past with your credit or loans? Of course, you can – and here are a few tips how to do it on your own.
Start by reviewing your credit reports which can be obtained from the credit bureaus. From that credit report, you can study your history and your past credit behavior to help you better understand your current credit position. Remember that you can get a copy of your credit report for free.
Remove accurate negative info in your account.
Inaccurate or unverifiable information from your credit report which also negatively affects credit score, is easy to remove as the credit bureaus will do it for you. But it is tougher to remove accurately reported negative information because the credit bureaus are within their rights to report it. Try paying for deletion even if it might take more time and effort than a simple credit report dispute. Keep in mind also that this will not instantly increase your credit score. It pays to be proactive by reviewing your credit report periodically to catch inaccuracies earlier before it could badly impact your score.
To know more about credit repair, click here.
Continue paying your debt on time.
When trying to rebuild your credit, you can’t expect overnight results. It takes time so be patient and while you’re waiting for your financial standing to be better, just continue to pay on time and pay more than the minimum if possible. Although it won’t give you excellent credit right away, this strategy will help your credit to improve gradually. After months of being a good payer, you will notice that negative information falls off and it will be replaced with positive information. Make paying on time a habit until you get back your good credit score and achieve the status of creditworthiness again.
Once you already achieve a good or a high credit score which is usually around 700, try not to make the mistakes of the past. Maintain your healthy score by borrowing only what you can realistically afford to pay back, and maybe even a little less. Remember that paying bills on time is an important, fundamental behavior to establish early on if you don’t want to be haunted by the consequences of a bad credit and be burdened by your irresponsible behavior in the past.