Tuesday, March 28

Top 7 Ways to Recover Your Bad Credit Score

Here is a story. I had a friend named Jerry, and he wanted to study abroad. So, after working hard and getting into an ivy league college, he was asked to make the fees payment, online. So, Jerry took his father’s credit card to make the payments but to his misfortune, the credit card did not have such a big limit. So, Jerry called his bank to increase the limit, but they said they couldn’t, because of the poor credit score.

Long story short, don’t be like Jerry.

The above was just one of the many instances and ways in which a poor credit score can hurt you. You don’t want to be a part of Jerry’s tribe, because boy, he worked hard to get into his dream college!

All that being said, we have got everything you need to know to recover your poor credit rating and help boost your credit score. And trust me, it will be a lot quicker than you expect it to be.

1. Pay off your credit accounts

If you are thinking that the moment you settle your unpaid debts, your credit rating will increase, you are wrong. That is just not how things work. The fact that you delayed payments, and by how long will always be a part of your report for the next seven years.

So why am I asking you to make payments, as soon as you can? That is because eventually you will have to, and satisfying the debts of lenders, landlords, and employers will finally enable them to see that you are doing at least the right thing. You may have derailed for a while, but in the end, when you repay, your perception in their eyes is bound to change.

2. Pay attention to your credit utilization

Your credit card company keeps updating you about your spending, and if it is too high in relation to your overall credit limit, be prepared for a poor credit report.

Therefore, this is also why paying your debt, to at least well under 30% of the credit limit is important. You do not want to appear overextended.

3. Increase your credit limits

Remember Jerry? He was unable to get into an ivy-league simply because his father’s credit card did not have the extended credit limit. You don’t want to be in that place. So, request a higher credit limit. If you are successful in doing so, your credit utilization ratio automatically decreases.

4. Never miss payments

A big reason why credit scores drop is that people often miss payments. This can either be an unconscious mistake or sometimes, a deliberate delay.

Whatever be it, your credit score doesn’t seem to care. If in the past you have been faulty in making payments, it is bound to impact your credit score. While you can’t change the past, you can take control of the present. So, make it a point to meet your due dates.

5.  Spend credit, to earn credit

If you claimed a credit card just for the sake of keeping it, chances are that it is doing you more harm than good. So, don’t be afraid to make payments in credit.

The fact that you make multiple purchases from your card and then later, meet their due payments, enhances your credit score. You want to feed excellent data to your credit reports, and paying bills on time does just that.

6. Add more accounts to your credit portfolio

You can have questionable information in one of your accounts, but eventually, if you increase the number of accounts in your credit portfolio, it’s sure to help you in the long run. If you manage your accounts responsibly now, it may overshadow your past problems.

7. Hire experts

Sometimes, the best advice you can have is not from us, or from anyone on the internet, but from real-life experts who have worked with people with similar concerns like you. They can be debt collectors, debt negotiation Australia, banks, and similar.  

Maintaining a healthy credit score is not as difficult as it seems. The funda is simple: May your payments on time and don’t let the debt pile up. Small changes in your daily lifestyle will eventually help you achieve bigger goals and a better credit score. All the best!

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