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Having a good credit rating is very important. It can impact your ability to get a job, an apartment, have utilities turned on in your name, get a credit card, buy a car or a home and many other things people do every day. But a bad credit rating does not have to permanent. So if you have done things in the past that resulted in you having a bad credit rating, there are a number of steps you can take right now to improve and restore your credit.
Good Credit is More Important Than Ever
Having a great credit rating is more important than ever. You may not even know which people and organizations are basing their decisions on if to do business with you based on your credit score and your credit rating. That's why if your credit rating is bad, it is essential that you do all you can to improve it. Credit repair and restoration takes a little time, so the sooner you begin the process the faster and easier it will be to begin enjoying the results. Here are a few very helpful and important credit restoration strategies and services that are available to you.
1. Have Errors Removed From Your Credit Reports
The easiest and quickest way to improve your credit rating is to get copies of your credit reports from the credit reporting companies, Experian, Equifax and TransUnion, go over them carefully and remove any errors you find. The U.S. Fair Credit Reporting Act states a person's credit report should only contain information that is timely and accurate. You have a right to make the credit reporting companies remove all inaccurate information from your credit file. You can request the errors be removed by each credit agency online using forms available on their websites.
Each year you can get free copies of your credit reports. Review them. If there is any evidence of fraudulent activity or old information that should have been removed, you can contact the credit reporting agencies and request the information be removed. It takes about 30 days for them to investigate and remove the errors you dispute. You are not penalized for negative history associated with the errors. Removing them improves your credit score.
2. Make Your Payments On Time
Another way you can restore and improve your credit rating is to pay all of your bills and debts on time. Payment history is the most important factor impacting your credit score. Repeatedly paying your bills late or missing debt payments is the fastest and most common way you can hurt your credit score and be seen as a bad credit risk. When you pay your bills on or before their due date, you credit rating gradually increases.
Your credit score can range between 300 and 850 on the VantageScores and FICO Scores credit scoring models. The higher the score the better.
If you are serious about improving your credit rating, always making payments on time is key. Do that, in a few months your credit rating will begin to improve steadily.
3. Reduce Your Credit Utilization
When trying to improve your credit rating, it helps to reduce your credit utilization ratio. That is how much you can borrow compared to how much you owe. It's second only to payment history when calculating your credit score. To improve your credit rating, keep your credit utilization ratio as low as possible. Don't accept or use every credit card or store line of credit you are offered if you want to improve your credit rating.
Not carrying any credit card debt helps to increase your credit rating. If you can't do that, keep your balance less than 30% of the total credit limit you have.
4. Pay Down High Balances
To improve your credit rating, pay down your debt to reduce any high balances you have. The goal is to keep 70% or more of any line of credit you have open. There are several creative methods for lowering maxed-out lines of credit, credit card accounts and your credit utilization ratio if you don't have much cash. They include getting a new credit and always paying off the entire balance and asking your credit card companies to raise your credit limits. This can instantly improve your credit utilization ratio.
5. Become An Authorized User
Convincing a generous, trusting family member or friend with great credit to make you an authorized user on one of their well-managed credit accounts they use frequently, that has no carried over debt and a perfect payment history can instantly improve your credit rating. Even if you never use the new credit card issued from the account, it is listed on your credit report and that of the original account owner. One downside is if the primary cardholder maxes-out their credit limit or begins missing payments. This will hurt your credit rating.
Being an authorized user of a credit account with an excellent payment record gives you
more spending power and improves your credit rating. However, you will only be able to
have the limited use of the credit account to which the primary cardholder agrees.
6. Sign Up To Get Experian Boost
Experian, a top credit reporting agency, lets you enroll in a new program where you can
add mobile phone and utility bill payments to your credit report. This new program is called Experian Boost. Sign up for it and any payments made on your regular expenses is included when your FICO Score is calculated. About 75% of consumers who have a credit score that's below 680 saw it improve when they used Experian Boost. Signing up for the Experian Boost program is free. However, users must verify they have a positive bill payment history with a linked bank account.
The average person using the Experian Boost program has seen their FICO Scores go up by
14 points. This may be just the boost needed to move your credit score into a better
7. Use Only Credit Restoration Companies With High Ratings
Should your credit report contain errors and you don't feel comfortable disputing them with the credit reporting companies, get professional help. Contact a credit repair company with a reputation for being trustworthy and effective that has highly skilled, well-trained, experienced staff. They will do the work required to contest incorrect information that is on your credit report. All you will have to do is identify which information on your credit report is erroneous. Highly rated companies like Credit Saint and Lexington Law specialize in handling consumer credit issues.
Top Rated Credit Repair Companies
The Credit Pros is ranked number one and is trusted by more than 100 000 clients. They offer Artificial Intelligence powered credit repair and have an A+ rating with the BBB. They offer easy-to-read credit reports and personalized score insights, as well as tools & tips to help you understand your score and take the next step. Best of all Credit Monitoring is Included at No Additional Charge which can help you spot potential identity theft.
Credit Saint is ranked number two for challenging inaccurate credit data. They will go over your credit report in detail, identify specific items with which you disagree and are damaging your credit rating, remove them and show you several effective techniques for improving your credit report and score.
Lexington Law has provided more results than any other credit repair law firm. Since 2004 they have helped over 500,000 clients repair their credit. In just 2020, they removed more than 9 million negative items from people's credit reports.