Start Fixing Your Credit Rating Now

Your credit rating is important. I mean really important. If you want to buy your own home, finance a car or have access to low-interest loans, you need to have a high credit rating that shows you’re a reliable borrower. So, if you’ve had financial trouble in the past and your credit rating isn’t brilliant, it might be time to start fixing your credit rating now. Here’s how:

Check Your Credit Report

Before you can really do anything about your credit rating, you need to check your credit report to see what’s what. More often than you might think, your credit report contains various errors that are pulling your score down. If you can identify any of these issues, such as incorrectly listed late payments or default notices, and dispute them with the credit bureau, you could drastically improve your situation in an instant.

Pay Down Your Debts

Sure, it might not be easy, but paying down any existing debts you have will make you feel better, put you in a more secure financial situation and improve your credit score. You see, if you are currently using more than 30 percent of the credit available to you, your credit score isn’t going to be as optimum as it could be. Conversely, if you’re using less than that amount, you might also be seen as a bad option for creditors, who want you to actually use the credit they offer.

Take Out a Loan

It might seem strange, but if you haven’t taken out any debt before, you are an unknown and therefore could be received as more of a risk, which means taking out a small loan and paying it bad quickly could help you to improve your credit score.

If you have a poor credit history, you might also want to look into how to get guaranteed unsecured personal loans with your history because, if you can secure a loan and demonstrate your ability to pay it back, creditors may start to trust you a bit more and your credit rating will improve.

Pay Your Bills on Time

You might think that paying the electricity bill a few days late is no big deal, but you’d be wrong. There are few things that can screw up your credit rating more than regularly paying your bills late. After all, if you can’t even manage to pay for the essentials on time, how are you going to deal with loan and credit card payments? So, if you want to see an improvement, set up automatic payments for all your bills and ensure there’s enough in your account to cover them.

Don’t Apply for Lots of Credit

Although it might be sensible to apply for a small amount of credit to build your rating back up, do not be tempted to apply for multiple credit cards and loans because each application will be logged on your credit file and push your score down.

Repairing your credit rating will take time, but if you take sensible steps to show that you’re a responsible person, you will get there one small step at a time.