how can i improve my credit?
if you want to improve your credit, the first thing you can do is check your credit report. knowing where your credit score can help you set some goals. federal law requires the three major credit reporting agencies (experian, equifax, and transunion) to give you a free credit report each year. you can obtain these reports online, or by writing a letter to request a credit report from those three agencies.
once you have a copy of your most recent credit report, it is helpful to look over it and make sure the information is correct. if you discover errors, like a loan that shows up that you didn’t take out, you may be able to fix them. after clearing up any errors, the best thing you can do to improve your credit is to make every debt payment on time and borrow less money.
beyond that simple formula, here are some tips to help you raise your credit score:
- understand the different types of debt. for example, secured debt is backed up by something you own, while unsecured debt is not. home and car loans are secured debt because the lender can take the home or car if you do not pay. credit card debt is unsecured. revolving debt (which can be either secured or unsecured) does not have set terms, meaning you can borrow more as you pay off what you owe.
- do not apply for more than one credit card or other type of revolving, unsecured credit in a short time.
- make sure you have a healthy mix of credit types, both secured and unsecured. this tells the credit agencies that you can handle different types of debt responsibly.
- be sure to make your payments on time and pay more than just the minimum. depending on the interest rate, paying only the minimum can lock you into a never-ending cycle.
- if you are young or have never had any debt before, you might want to get a credit card or other line of credit to build your credit history. be mindful not to spend more than you can pay off every month.
- lenders want to see that you have a healthy debt-to-credit ratio instead of having too much debt. if the limit on your credit card is $10,000, then experts say it is good to owe no more than $3,000 or 30%.
- while it may make sense to pay the balance on one card with a new card that has a low interest rate, keeping older credit cards or lines of credit in good standing helps your credit score.
- applying for a secured credit card is a great way to build credit if you’re new to the game. these require you to pay cash ahead of time similar to a debit card. you can also use it to rebuild your credit after going through bankruptcy or other debt-related problems.
how can i change incorrect information on my credit report?
sadly, credit report errors are not rare, and those errors can keep you from getting a loan. credit reporting agencies are typically required to correct any errors within 30 days, so corrections can raise your credit score right away. these are some examples of errors you might see:
- information about someone else, such as someone who has a similar name, lived at your same address, or someone who has stolen your identity.
- wrong personal information, such as the wrong birth date, address, or phone number.
- wrong account status, such as a closed account reported as open, up-to-date accounts reported as having late payments, or the same debt listed more than once.
- account balance or credit limit errors.
- accounts that are unfamiliar to you.
- negative information that is more than seven years old.
if any of these or other errors are lowering your credit score, you will want to gather copies of financial documents to prove the information is wrong. if you are a victim of identity theft, you will want to collect copies of police reports, ftc statements, or make an id theft affidavit. all three credit reporting agencies provide online forms that you can use to correct information. it is also a good idea to contact the financial institution that sent the wrong information to the credit bureaus.
the credit bureau will likely respond within 30 days after it looks at your claim. if it finds that the information is wrong, it will send you a corrected copy of your credit report. you may also ask them to send copies to any employers or creditors who have checked your report in the past two years.
what should i avoid when trying to fix my credit?
plenty of actions can hurt your credit score, such as making late payments and generally failing to follow the tips above. in some cases, not doing something can be just as harmful. but some of the things that can hurt your credit are less obvious, such as:
applying for a lot of credit at once. even though special offers tied to credit cards can be tempting, applying leads to a hard inquiry into your credit. too many of these at once suggest you may be a high-risk borrower.
closing a credit card account. putting away or cutting up a credit card may be a good idea, but canceling a credit card may hurt your debt-to-credit ratio or shorten your credit history.
not using credit for a long time. even if you are trying to be more responsible, a hard stop of your credit use for a long time can hurt your credit. you might consider making small purchases that you can fully pay off every few months to keep your accounts active.
suffering from other people's missed or late payments. if you are the authorized user of another person’s credit card and they miss a payment, it could hurt your credit as well. also, it helps to make sure that any loans you have co-signed stay in good standing.
who can i talk to about fixing my credit?
sometimes it is a good idea to get professional help with your credit. a lawyer, in particular, can review your credit report, help settle debts, speed up the process of correcting errors, and much more. a big plus of working with a lawyer to fix your credit is that they are equipped to handle complex legal matters that may arise. a lawyer may also be able to help you avoid certain debts entirely.
typically, when you visit a lawyer, they review your most recent credit reports to find errors or other problems that need fast attention. the next steps depend on your situation and needs, whether you can work out a debt settlement, declare bankruptcy, or make a new plan to improve your credit.
what can i do to manage my credit in the future?
fixing your credit score and keeping it high is not a one-time event. instead, it is ongoing work. besides doing things that help your credit score and avoiding actions that hurt it, it is important to check your credit reports often and start other good habits, like these:
- set up payment reminders.
- pay as much toward your balance each month as you can afford, and always more than the minimum. if possible, set up automatic payments to pay the full balance every month.
- be careful about which credit cards, loans, and lines of credit you apply for.
- make sure you pay down your maxed-out cards first.
- look for cards that offer 0% interest on balance transfers (but be sure to pay them down before the no-interest period ends).
- try to fix fraudulent credit card transactions or make a request to cancel a fraudulent credit card account as soon as you notice them. fraudulent accounts and transactions are ones that you did not make or that show the wrong amount.
- if your identity has been stolen, submit a credit freeze request to stop the thief from using your identity to open credit accounts.
these tips can help you deal with debt and raise your credit score. but if you have more questions, or need help fighting debt collectors, reach out to a 2022世界杯32强抽签时间 network attorney for affordable legal advice.
this article contains general legal information and does not contain legal advice. 2022世界杯32强抽签时间 is not a law firm or a substitute for an attorney or law firm. the law is complex and changes often. for legal advice, please ask a lawyer.
