Fix Bad Credit In Some Easy Steps

Nowadays there are a lot of advertisements on the internet in which they claim that they can fix credit score in a certain number of days. The truth to this statement is that the person who has bad credit score should take actions in order to improve his credit score. Only his actions can help in increment or decrement of credit score. First, let us discuss the problems with bad credit.

Well, bad credit is not a huge problem until there is a need for borrowing money from legal sources in the market. These legal sources can be banks or companies. There can be an urgent need for money anytime. Thus, the credit score should be at good level else the person may have to compromise with the deal. Even if there is a deal, the lender may keep interest rates and other fees high as the customer is not having any other option. Thus, having an excellent credit score can help in a difficult time. Now let us see some steps through which any person can improve his credit score without even spending any money. 

• Figuring out the actual condition: The individual should first figure out the exact value of his credit score. For this, he should check his credit report. A credit report is prepared by credit bureaus and there are a lot of service providers who can provide credit report for free. This method may take a little bit of time. To bypass this, the customer can check his credit score directly on online websites. This way he can figure out the type of his credit score as bad, good or excellent. 

•Correction of mistakes: The second step is the correction of mistakes in a credit report (if any). Credit reports are not totally generated by machines, thus there can be mistakes. Correction of these mistakes timely can help in faster recovery of credit score. The best way is to not argue about mistakes, correct them and move on. 

Reviewing major events like credit cards, outstanding loans and other major purchases are important. These are the events that can have a severe impact on credit score. In case of mistakes the individual needs to submit the proof in order to seek correction. The process is to explain the mistake, include a copy of the credit report along with other documentation and proof. The credit bureaus have a time limit of 30 days to respond according to the details. 

• Stop bad activities: Once there is a credit report the individual can figure out the factors that are lowering the credit score. Now, these mistakes must not be repeated again and again. Below are the three solutions that can help in this:

Pay the bills timely: Payment history has a weightage of approximately 35% in the credit report. If an individual is doing late bill payments then this is going to be reflected in the credit report. This solution to late payments can be achieved by making a budget. He should make sure that his spending should be lower than earning. 

Lower the debt: After doing timely bill payments, try to lower down the debt. This is because total debt like credit card debt or loan also contributes a significant amount in preparation of credit report. The individual should not take a loan of small interest rate to pay the debt of a higher interest rate. This can be a good approach but in case it backfired, it can affect the credit score.

Avoid irrelevant applications: Applying for a credit card means that the lender is going to review the application. This is going to hit the credit score. In case the credit card application is rejected, it gets added to the credit report. Thus, in case of low credit score don't apply for a credit card. If there are unavoidable circumstances then only go for a credit cards for bad credit as they are designed for people with bad credit score.