When you’re young and have a poor credit history, it may not seem like a big deal. As you grow older, however, you become more reliant on credit to make big changes. A credit score decides not just your ability to buy a car or home, but even to move out on your own and rent. Some employers may also choose not to hire you if you have a poor credit history, especially for positions that involve budgeting or other aspects of handling money.
It’s no wonder that so many people seek out credit repair options to fix those past mistakes. The question many people grapple with is where to start. Here are some basic DIY tips to consider.
1. Review Your Credit Report
It’s impossible to fix something you don’t have full access to. Knowing your score from Credit Karma or some other free scoring model is a great start. However, what you really need is a copy of your actual report. Try to get your full credit history from Equifax, TransUnion or Equifax. They owe you an annual free copy.
2. Dispute Errors
Most credit reports have at least one error. Some of these are minor and have little if any effect on a person’s credit score. Others may have a significant effect, so correcting them could lead to an automatic increase in due time. Be sure to look out for suspicious activity as well, which could signify identify theft. These include strange addresses or unknown accounts.
3. Don’t Expect Overnight Success
Many people do not try to repair their credit until just when they need it. Unfortunately, there is no quick fix for bad credit. It takes time. You will need at least three months to start seeing results and up to a year to make real progress. If you know you have a big credit purchase coming up, plan as far ahead as possible.
4. Fix Your Payment History
Experian warns that derogatory marks stemming from your payment history may negatively affect your score for up to 10 years. Keep up with payments to create a new track record of reliability even if you have recent mistakes. Consistency is key.
5. Create a Budget
Fixing lifelong spending habits is easier said than done. The first step is to create a budget. Note all your bills, when they are due and which paycheck should cover each one. Then, prioritize at least one debt at a time and focus on paying that off.
6. Choose a Repayment Strategy
Which debt you choose to pay off in what order depends on the method you adopt. Most finance gurus recommend two main methods: debt snowball and debt avalanche. Snowball requires starting with the smallest debt and working your way up. Avalanche prioritizes debts with the highest interest rates.
7. Use Experian Boost
In the past, credit reporting bureaus gave no importance to making your phone or utility bill payments on time. Yet, if you default on these, they end up on your credit report. Experian recently changed this. If you have an excellent payment history for your utility and phone bills, consider Experian Boost. The service is free.
8. Increase Credit Limits
Once you start to make progress, you may notice something unexpected. A few credit card companies may notify you that they have increased your credit card limits. If this doesn’t happen automatically, then call and ask nicely. Increasing your credit limits will help to reduce your credit utilization rate.
9. Keep Up the Good Work
Once you get your credit repair progress on track, it’s important to maintain that. Try to keep up with all debts and refrain from taking out any new ones until you repay what you currently have. A consistently good payment history going forward helps to get you back into the good graces of lenders over time.
10. Buy Tradelines
To give your credit repair journey an extra boost, consider tradelines. The older they are, the better they will be for your credit report, as it ads age. As is the case with asking for higher credit limits, if you’ve maxed out your credit cards, tradelines help to reduce your overall credit usage.Are you interested in using tradelines to boost your credit score? Coast Tradelines can help. We serve more than 700 clients every month. Complete our tradeline assessment and find out why so many of our clients are happy with the work we do.