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Having a bad credit score can significantly reduce your chances of securing a loan, getting your mortgage application approved or even renting an apartment. Sadly, more than 11% of Americans possess a bad credit score with derogatory marks. This puts consumers between a rock and a hard place when it comes to buying a car, paying for college and seeking essential government services.
Luckily, there are several measures you can take to reverse your dwindling credit score. Some techniques, if implemented properly, may produce quick results while others may take longer to work. One of the most effective ways to improve your bad credit is by engaging in certain services that can fix your credit score.
Here are 6 unique ways to improve your credit score fast:
1. Hire a good credit repair company
If you want to fix your subpar credit score, then the best way to do this is by hiring an experienced credit repair firm. Such companies will go through your credit history to get any discrepancies or errors that could be hurting your credit score. They then work in tandem with the three national credit bureaus (Experian, Equifax and TransUnion) to eliminate these damaging inaccuracies, which inevitably boosts your credit score. When selecting a credit company, ensure you choose one that has an impeccable track record.
2. Avoid accruing new debt
Most adults are inclined to take on loans for mortgages, college, emergencies and general life improvement. However, accruing too much debt without paying it back on time can severely hurt your credit score. Debt accumulation is a vicious circle that entraps many people, causing them to ruffle the feathers of creditors and law enforcers. However, you can avoid worsening your already poor credit score by steering clear of any new debt as you strategize on how to boost your credit rating.
3. Pay off existing debt
In case you have pending bills that are long overdue, it might be a good idea to pay them off promptly. Your credit score will definitely improve when you start making positive incremental changes. Ensure you come up with a foolproof plan to repay your creditors. In some cases, you might be required to engage in several revenue-generating activities or have different streams of income that can help you get the money needed to cover your debt. The good news is, that there are hundreds of online and offline gigs you can try to boost your income. Remember, a stitch in time saves nine. Paying off your debt might be a relatively slow and treacherous road to take, but its fruits are certainly worthwhile.
4. Consolidate your debts
Debt consolidation is a smart move to make if you’re looking to improve your credit score fast. It involves taking out a big loan to offset all your smaller debts. Essentially, debt consolidation allows you to have one single, manageable loan that you can gradually pay off. It has a number of advantages. For instance, it comes with favorable terms of payment and has remarkably low-interest rates. You can either choose to get a secured or unsecured debt consolidation loan, which makes it very convenient for most people.
5. Maintain a low credit utilization ratio
If you often find yourself maxing out your credit card, then it’s probably time to shake off that habit. In fact, you should maintain your overall outstanding balance at less than 30% of your credit limit. The lower your credit utilization ratio, the quicker you can improve your credit score. You can use the high balance alert feature of your particular credit card to keep tabs on your credit utilization. Ensure that all your credit card balances are entirely paid after every month. Keeping your credit utilization ratio at less than 10% is deemed ideal for individuals looking to boost their credit scores.
6. Avoid late payments
Your payment history can significantly impact your credit score. If you never pay bills, utilities and revolving debts on time, then you risk scoring a poor or subprime credit score. If you want to improve your bad credit score, ensure that you pay off your loans and credit card balances on time within the next few months. Some people have a difficult time affording certain bills − this is quite understandable. Just ensure you discuss hardship options with your respective credit card company. You can utilize free credit monitoring services to check whether your credit score is improving over time.
Whatever your motivation is, boosting a poor credit score is a worthwhile goal to have. You can use one or a combination of techniques discussed above to improve your credit score fast.
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