You have a less than desirable credit score and you know you need to repair it but how? Read on to learn the first 5 steps you need to know in order to begin repairing your credit score right now.
#1 Make a Budget
In order to repair your credit score you need to first understand where your money is coming from and where it's going. We all know we should have a budget and you may even think I know where my money is coming from and going, but it may not be enough. The first step in repairing your credit score is to document all of your income and expenses. Paychecks, child support, alimony, social security - write down how much you get and how often. Next track all of your expenses. If you are spending $400 week on groceries, you're spending too much unless of course you are feeding over 100 people.
#2 Get a Copy of Your Credit Report
The three major credit bureaus include: Equifax, Experian and TransUnion. You are entitled to a free copy of your credit report as mandated in the federal Fair Credit Reporting Act, once a year.
#3 Check for Mistakes on your Credit Report
Mistakes can greatly damage your credit score and if it is not your fault you should not have to pay the consequences. Write down every bit of outdated information (over 7 years old) and incorrect or misleading information. Complete the Request for Reinvestigation form that is usually included with your credit report. Try to include any proof of the outdated or incorrect information.
#4 Add good Accounts to your Credit Report
Many do not know that this is an option but most credit bureaus will add good accounts to your credit report and increase your score if you can prove to them that you have accounts in good standing. Write a letter to credit bureaus including information on the accounts and include copies of canceled checks and/or account statements that prove you have been in good standing for X amount of time. Good things to include are utility payments, car payments and long-standing employment. Remember most places only report you to the credit bureaus when you have become delinquent.
#5 Use your Credit Card
I know that sounds odd, but credit gives you the best results to your credit score. Never put more on your card than what you can reasonably afford. Use your credit card every month. It is best to only have one or two cards and pay your bill every month. One common mistake people make though is paying off the entire card every month. This will not help your credit score as no credit is really being given. Keep one card use it every month for $100 or less and pay at least the amount due, but less than the total amount.
Now that you have set up a budget and are following it, along with correcting mistakes on your credit report, added accounts in good standing and are responsibly using your credit card you are well on your way to repairing your credit score. Good Luck!
#1 Make a Budget
In order to repair your credit score you need to first understand where your money is coming from and where it's going. We all know we should have a budget and you may even think I know where my money is coming from and going, but it may not be enough. The first step in repairing your credit score is to document all of your income and expenses. Paychecks, child support, alimony, social security - write down how much you get and how often. Next track all of your expenses. If you are spending $400 week on groceries, you're spending too much unless of course you are feeding over 100 people.
#2 Get a Copy of Your Credit Report
The three major credit bureaus include: Equifax, Experian and TransUnion. You are entitled to a free copy of your credit report as mandated in the federal Fair Credit Reporting Act, once a year.
#3 Check for Mistakes on your Credit Report
Mistakes can greatly damage your credit score and if it is not your fault you should not have to pay the consequences. Write down every bit of outdated information (over 7 years old) and incorrect or misleading information. Complete the Request for Reinvestigation form that is usually included with your credit report. Try to include any proof of the outdated or incorrect information.
#4 Add good Accounts to your Credit Report
Many do not know that this is an option but most credit bureaus will add good accounts to your credit report and increase your score if you can prove to them that you have accounts in good standing. Write a letter to credit bureaus including information on the accounts and include copies of canceled checks and/or account statements that prove you have been in good standing for X amount of time. Good things to include are utility payments, car payments and long-standing employment. Remember most places only report you to the credit bureaus when you have become delinquent.
#5 Use your Credit Card
I know that sounds odd, but credit gives you the best results to your credit score. Never put more on your card than what you can reasonably afford. Use your credit card every month. It is best to only have one or two cards and pay your bill every month. One common mistake people make though is paying off the entire card every month. This will not help your credit score as no credit is really being given. Keep one card use it every month for $100 or less and pay at least the amount due, but less than the total amount.
Now that you have set up a budget and are following it, along with correcting mistakes on your credit report, added accounts in good standing and are responsibly using your credit card you are well on your way to repairing your credit score. Good Luck!
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