Bad Credit Score | So You Have a Bad Credit Score…
Learn how to fix your bad credit score and to never get stuck in this position again. Having a bad credit score makes it hard to live life and get the credit you deserve. You can’t undo your bad credit score, but it is possible to raise your credit score no matter how bad it is. Keep reading and learn how to raise your bad credit score.
Have a Bad Credit Score? Let’s Set Expectations First
Before we begin, we need to set some expectations on what you will get from this article. Only keep reading if you are serious about raising your bad credit score. If you don’t think your bad credit score is your fault or if you expect to raise your bad credit score overnight, please stop reading. Those expectations are unrealistic. Now that we’re on the same page, we can continue.
First of all, you have nobody else to blame for your bad credit score. You need to understand that you got yourself into this mess. If it was your bad habits of paying bills late, not paying bills in full, or getting yourself into debt, whatever the reason for your bad credit score, you must be held fully responsible for it.
Secondly, you need to understand that you cannot raise your bad credit score overnight. It is not possible and will never be. It is a long and arduous journey and will be tough. If you are not ready for this, then do not continue with this.
Third, you must accept that your behavior has caused your bad credit score and you need to break those bad habits. If you continue to go with what you were doing before, you will end up in the same position again.
Now that we got that out of the way we can continue.
How To Fix Your Bad Credit Score
1. Do not ever pay your bills late.
You may already know this by now and this is probably the reason that you got a bad credit score to begin with. Paying your bills on time and in full is crucial and the most important way to raise your credit score. Just by paying your bills on time and in full, you will have a credit score of at least 600. You’ll need to do it for a few years at least to get up to there if you aren’t already.
2. Keep your credit utilization ratio low.
Your credit utilization ratio is your debt-to-credit ratio. Take the amount of debt you have on your credit card and divide it by the amount of credit you have available. For example, if you have $5,000 in debt on your Visa card, and that card has a $10,000 limit, your credit utilization ratio is 50%. You need to lower it to under 30% and that is the ideal number. To do this, you can pay off your debt and request a credit line increase as you are paying down debt. You must also take an aggregate of all your open lines of credit and find out the credit utilization ratio there too.
3. Build your credit history
The longer you have a line of credit open, the longer the length of your credit history. Do not close credit cards unless you have a specific reason. Don’t get too many inquiries on your credit report. Credit inquiries are also called a hard pull or hard inquiry. This is a request from an institution like a bank or even your landlord to access your full credit report. This happens when you apply for credit cards or open bank accounts. You do not need too many credit cards.