Room For Improvement: How To Rebuild Your Credit Score

A three-digit number known as your credit score can have a devastating effect on your lifestyle if it isn’t high enough. A low credit rating can affect your ability to secure a car loan, a mortgage or even an apartment. Low scores affect your interest rate, insurance premiums and in some cases, your employability. The good news is there are ways to improve your credit score, within a few months.

Know where you stand

Checking your own credit rating will give you a snapshot of where you stand on the scale at the moment. You can do this through a number of different agencies and they don’t all charge a fee. See if there are any errors or discrepancies in your report and take steps to correct them. Credit fraud is prevalent today and you may need to launch an investigation or complaint (at no cost to you). Keep in mind; every time you apply for credit and a “hard inquiry” is made on your behalf, it negatively affects your credit rating. For that reason, it is important to keep your credit applications to just a few per year. This includes those store credit cards you are offered every time you go to the mall. Improving your score takes discipline and some sacrifice, but it will be worth it in the long run as it sets you up for better financial security.

Set yourself up for success

Like a disciplined fitness regimen, you can improve your credit fitness with a detailed plan of action. First, make sure you never miss another credit card or rent payment. Set up your bank account for automatic withdrawals. Stagger those throughout the month so you aren’t hit with all the bills at once. Reduce your running debt so that it is less than one-third your total allowable amount. If this isn’t possible, ask for an increase in your credit limit so the ratio improves. Pay off any other debt where possible, like a car or student loan, to reduce your overall debt load. A credit rating is an in-the-moment snapshot of your situation. Spread out your larger expenditures (new car, student tuition fees, family vacation) throughout the year so your score doesn’t take too big a hit all at once.

Seek help if you need it

When repairing your credit worthiness, you might need extra help. Unless you are a financial expert, there may well be other areas that you can work on to improve your credit score. Consider contacting an expert in credit repair for assistance. They will work to remove any negative items that appear on your credit report like liens, repossessions or foreclosures.

By taking these simple steps to improve your credit rating, you will be improving your situation significantly. Not only are you more likely to be approved for anything credit-related, you might also find you are saving money because you are more aware of your spending and striving to stay on budget going forward.