Most of us rely on borrowing from time to time, whether it’s a mortgage to buy a property or a loan to purchase a new car. The effects of a bad credit score can be catastrophic, making borrowing more expensive or blocking access completely. This is why it’s essential to actually understand your credit score and the potential impact of a poor one.
You’ve probably got a rough idea of whether your credit score is good or bad but do you know exactly what it’s likely to be? Or how to repair any problems? Here’s what you need to know about checking and fixing a damaged credit score.
Get the Report
If you know your credit score doesn’t make good reading, it’s easier to avoid the subject. However, it’s important for everyone to know exactly what’s being recorded, and to ensure that the details are accurate.
It’s possible to order a copy of your credit report and this is the best place to start. By taking a look, you can see what your credit score is and what factors are influencing it.
As well as helping you to repair any damage, checking your credit report can also identify any fraudulent activity. Identity theft is a real problem, and ensuring there is no unauthorized activity is a good way to protect yourself.
If there are any entries on the credit report which are inaccurate, you can ask for them to be put right. This is one of the easiest ways to improve your credit score, and it’s something you can do right away.
It’s not unusual for companies to forget to update the credit information they provide or to release incorrect data. This is why it’s always good to check your report, even if it is uncomfortable reading.
In cases where the data is not wrong but there are extenuating circumstances, it’s possible to place a note on your file. This may not change the actual score but lenders will gain a better insight into your circumstances and it may be the difference between being accepted or declined.
Improving Your Score
A damaged credit score isn’t a permanent problem; with a bit of focus it’s possible to improve your rating. No matter how badly your credit score has been damaged, there’s always a way of repairing it, even if it takes a bit of time.
Showing a consistent pattern of repaying debt promptly and in full will bump up your score. It’s therefore essential that you manage your repayments properly. Missing or being late with payment will show on your credit record and do further damage. If you make payments in a timely fashion, this will gradually start to improve your score. Bear in mind that it won’t happen overnight as lenders like to see a consistent commitment to paying what you owe.
Having credit cards or other types of borrowing is good for your credit score if you are making prompt repayments. This is because it gives you the opportunity to prove that you are trustworthy in making repayments. It’s harder to repair your credit rating if you don’t have any credit at all.
However, having too much credit can be damaging, as it can seem as if you can’t manage your finances. The same applies to maxing out all your credit cards. If you have a lot of credit cards or loans, repaying some and retaining a low balance on others will boost your score and improve your rating.
Reliability and Consistency
When lenders are looking at your credit score, they want to be able to see that you’re reliable and will repay what you owe without any hassle. Anything you can do to show that you use credit in a responsible way will help to repair your rating and make you a more attractive prospect.
If your credit score is less than perfect, it may take a little while for your score to start to improve but with a diligent and consistent approach, it’s possible to get things back on track.
HussaiN is a full-time professional blogger from India. He is passionate about content writing, Tech enthusiast & computer technologies. Apart from content writing on the internet, he likes reading various tech magazines and several other blogs on the internet.