Credit is one of the most important factors for your financial health, but it’s also fragile. It takes years to build a good credit score, but it only takes months to damage it. It’s crucial to take steps to improve your credit, and you can do this by building an on-time payment history and avoiding bad behavior that can send your score spiraling downward.
It’s also a good idea to check your credit reports regularly, says Lamine Zarrad, CEO of the non-profit credit counseling company StellarFi. “You’ll find out where you stand and if there are any errors that you can dispute,” she says.
Dispute errors, which can include everything from identity theft to unpaid debts, are the most common reason credit scores go down. Fortunately, there are laws in place to protect you from being unfairly treated by credit bureaus.
In addition to being able to dispute inaccurate information, you should also keep an eye on your credit cards to make sure that your utilization ratio stays low and you’re not overspending. You can do this by setting due-date alerts on all of your accounts. Many companies allow you to set up email or SMS notifications a few days before your minimum payment is due, and you can also call your credit card company to ask for a credit limit increase if needed.
Another way to repair your credit is by getting an installment loan, such as a mortgage or car loan. However, you should be careful not to overspend and apply for too much credit at once.
Opening too many credit cards at once can hurt your score, as can closing old ones. If you want to apply for new credit, consider opening a small amount of credit in your name (such as a store-branded credit card) and then using it sparingly.
Paying bills on time is the most effective way to fix your credit score. Creditors and credit bureaus have to follow strict rules regarding how they report on your credit, and you’ll want to keep an eye on your credit reports for any errors that may occur.
The best part about this is that there’s nothing a credit repair company can do for you that you couldn’t do on your own for free. They can only remove negative information that is accurately reported to the credit bureaus.
To begin fixing your credit, start by ordering a free copy of your credit reports from each of the three major agencies. Then, carefully review each report for any errors that you can dispute. Remember, the agencies don’t typically share their reports with each other, so you might see different information on each of your three credit reports. Order your reports from each of the three credit agencies every year to keep an eye on any changes. You can do this by visiting the website of each of the three credit bureaus or by calling 1-877-322-8228. Then, once you’ve verified your identity and disputed any incorrect information, you should see your credit score improve over time with consistent responsible behavior. how to fix my credit