It’s no secret that your credit score can affect many important things in your life.1 Your credit score is a combination of your payment history, credit history, what you owe, types of credit accounts, how much credit used and more. With so many factors and the unpredictability of life, it’s possible to get into some bad credit situations. Unfortunately, there isn’t a fast solution to better your credit score. However, hope is not lost. These steps can help put you on a better credit path.
Pay bills on time
Your credit score can take a big hit if you consistently pay bills late.2 Things don’t always go as planned, but try your best to be on time. To help with this, set up auto-pay, enroll in payment reminders, or write due dates down in a planner or somewhere else you will see it. Paying your bills on time also prevents having accounts go into collections, which also hurts your score.
Try to pay off debt
We understand this may not be the easiest task to accomplish, but if you have an opportunity to work on paying debt, your credit would see the benefit. Take time to collect statements and account information to take stock of what you owe and the interest on each debt. Then, prioritize the debt with the highest interest3 rate and set up your own payment schedule. Set realistic goals for when you want to complete payments and create a plan to work it into your budget.
Avoid unneeded credit
If you don’t need a new credit account, don’t open one.4 While you may think it is a good idea to have more access to more credit, your credit score won’t be helped by opening accounts. When you apply for credit, it will show up on your credit report as an inquiry. If there are too many inquires showing up on your report, this can lower your credit score. Also, if you have too much access to credit, it may be tempting to use more than what you would be able to pay back.
Check your credit reports
Did you know that each year you are entitled to a free copy of your credit report from each of the three main credit reporting agencies? It’s important to check over your credit report,5 because mistakes can happen and can hurt your score. If you see a mistake on your report, be sure to dispute it with the credit agency with evidence to back up your claim. It’ll be a help to your score to get those disputes resolved.
The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial® .
1DiGangi, Christine. (2020, Mar 24). Retrieved from: https://www.credit.com/credit-reports/how-credit-impacts-your-day-to-day-life/
2Barroso, Amanda and O’Shea, Bev. (2022, Sept 23). Retrieved from: https://www.nerdwallet.com/article/finance/late-bill-payment-reported
3MyFico. Retrieved from: https://www.myfico.com/credit-education/improve-your-credit-score
4Experian. Retrieved from: https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/
5Hardekopf, Bill. (2021, Sept 16). Retrieved from: https://www.forbes.com/sites/billhardekopf/2021/09/16/the-importance-of-obtaining-and-checking-your-credit-report/?sh=4d42f0f77dc5