How to Fix a Bad Credit Score

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A bad credit score can be disastrous for your financial health. A low score can prevent you from buying a car, obtaining a mortgage or even getting a job. There’s no two ways about it; fixing a low credit score is vital to restoring your good name. How long does it take to fix a bad credit score? What are the best methods to repair credit? Read ahead to find out.

Dispute Errors on Your Credit Reports

Entries on your credit report that are out of date or incorrect can have a severely negative impact on your score. Dispute those items with credit reporting agencies so that they can be removed. The three main credit reporting agencies are Transunion, Experian and Equifax. Reach out to the ones that have the errors on them, and do so in writing so that you have a paper trail. The agencies have 30 to 45 days to confirm the information is valid, or they’ll have to remove it from their records, as stated by the Federal Trade Commission (FTC).

Make Sure Your Payments Are On Time

Pay whatever amount you owe to your credit account each month. Whenever you make a payment on time, you create positive history and improve your score. Conversely, one missed payment can cause your score to drop dramatically. Timely payments help raise your score bit by bit. Over time, the impact that your late payments had on your credit score decreases. Your FICO score increase will show that although you may have had problems in the past, you’ve worked hard to overcome those issues.

Set Up Automatic Payments and Reminders for Regular Payments

Virtually all credit card companies allow you to set up automatic credit card payments. By doing so, you’ll be able to make sure that you never miss a payment again. Log in to your credit card account, and go to the payments area. Enter your banking information, and set the date that you’d like the payment to be deducted from your account. Set it to “recurring payments” so that you don’t have to worry about missing payments. You can decide if you want to pay the minimum each month or if you’d like to pay off the balance.

Sign Up With Experian Boost

Experian Boost is an excellent program that lets users include their utility bills on their credit reports. Utility bills are not usually included on credit reports, so having them added can help boost scores instantly. The program is completely free to join, and it’s had a really positive impact on the scores of people with stunted credit history as well those who simply had low scores.

Get Your Balance As Close to Zero As Possible

Your credit score will see a significant bump as you lower your credit card balance. Credit reporting agencies prefer to see balances below 30 percent utilization, as stated by Experian. This means they want your credit card balance to be 30 percent or lower than your overall credit limit. Keeping your balance under this 30 percent threshold is great, but getting your balance as close to zero as possible is even better.