Bad credit is something that is stopping many people in the country from accessing loans, getting favorable rates, or even getting access to basic amenities. It can feel crippling and can be tough when it’s the result of mistakes you made when you didn’t know better. However, you shouldn’t despair, as people get out of their bad credit situation every day by making conscious changes. These can be extremely simple too; the only issue is that many people are completely oblivious to them. Let’s take a look at a few things you could do today to improve your credit score.
Know if You Have Bad Credit in the First Place
The first thing you should do is check your credit report. A lot of people may assume that they have bad credit, but you may not know that some collections will be removed from your report after a set number of years. These will differ from jurisdiction to jurisdiction, but every state has limitations on credit report entries.
We also suggest that you get educated on how to tell if you have a good credit score. Every credit agency will have a different scale, so you have to be familiar with them if you don’t want to assume you have bad credit because you’ve misread their score.
Have Any Mistakes Removed
Another thing you should know is that there may be false entries on your report that are hurting your score. So, make sure that you get a free copy of your credit report from one of the three main credit reporting agencies: Experian, TransUnion, and Equifax, today. Look into them in detail and see if there are any anomalies. Every one of these agencies has a simple procedure you can follow, and you will be able to supply supporting documentation in most cases as well.
Get a Secured Credit Card
This is one of the best and easiest things you can do to improve your credit score. You want to create positive activity, meaning that you have some cash flow and can use credit responsibly. Secured credit cards are cards that will use a cash deposit as collateral. These are often referred to as “guaranteed” credit cards as it’s virtually impossible to get turned down for them.
Reduce Balances on Cards
Another great way to instantly improve your credit is to reduce your credit utilization ratio. This is how much of your credit limit you’re currently using. Many experts advise that you keep this number around the 50% mark, and we agree. If you want to get there, one of the first things we would advise is that you commit to only using one card, and lock the other ones away somewhere. Also, note that closing accounts will not help your credit. It could even hurt it down the line, believe it or not. This is because it could affect the average age of your accounts negatively. Instead, show good activity by using your accounts responsibly and committing to paying more than the minimum each month.
These are all simple things that you could do starting today to rebuild your credit. You have nothing to lose and most of these only take a few minutes or a change in habits, so do act now.