If you are like many people, you may run into a problem with your credit. With improper usage of your credit card, buying items you can’t easily and reasonably pay for or not paying your bills on time or at all, you can suffer from bad credit. However, there are ways you can gradually fix bad credit.
First, check your credit reports. You can receive your annual credit report for free from the major credit reporting agencies of TransUnion, Experian and Equifax. Thoroughly check your reports and ensure that all of the information is correct and that there are no errors. You should even check for any incorrect addresses or personal information, as that can mean that your account was confused with someone else’s. If you find any outdated information, request for it to be removed. You should also request a report update if you have since received a higher credit line. This can help your credit utilization ratio, which can in turn improve your credit score.
If your credit is bad because you have not paid your bills on time or in full, you will want to lower your credit utilization ratio. Pay off any outstanding debt, even more than once per month if necessary. You can also request a higher credit line, as mentioned previously. Be aware that doing so can trigger a new credit inquiry and that it can harm your credit score for six months to a year.
Avoid applying for any new credit cards. Doing so while your credit is already bad can cause it to become even worse. On that same token, you should also avoid canceling credit cards while working to improve your credit. You may, however, want to apply for a personal loan to help pay off your debt, if necessary.
Overall, the best way to improve your credit is to pay your debts back. It is wise to always make more than the minimum payment and to pay part of a bill early in any given month and then the remainder of it later in that month.