How to Improve Your Credit Rating

The financial crisis of 2008 was a disaster for millions of consumers’ credit scores. If you’ve suffered from one of the many mishaps that can change your credit rating, you might be finding it increasingly difficult to get any credit whatsoever. If you do manage to secure a loan, the rates could be astronomical. It is actually possible to legally improve your credit score if it contains reporting errors, and here’s how you can do it:

Fix The Admin Errors First – Believe it or not, 70% of credit reports contain errors that don’t have anything to do with a person’s financial status. You must get a copy of your own credit report and check obvious things like account numbers and addresses. You might not think it makes a difference, but when a company runs a credit check, these errors will most definitely show up and could change your score dramatically.

Pay Bills On Time – One of the obvious ways to improve your score is to avoid late payments on utility bills and credit cards. These are the sorts of things that happen due to forgetfulness rather than financial status. Think about reorganizing them to a set time of the month, and then initiate a direct debit so that nothing is overdue. You could contact any companies that have missed payments as a gesture of goodwill. They will often remove a reference to late or missed payment if you’re efficient about correcting errors.

 Get A Secured Credit Card – It’s often true that it takes a credit rating to begin getting credit! You can break this cycle by taking out a secured credit card from your bank. These cards require you to deposit an equal amount of money to the card’s credit limit into a special bank account so that the bank can be assured you have the funds to pay it back.

Don’t Close Historic Accounts – If you’re using a credit card already, don’t close it when it’s paid off, or if you find a better deal. You can always cut it up or store it away safely if needs are. Credit history is improved if you have historical accounts that have good standing.

Search The Right Way – Applying for loans can also damage your credit score. It’s best to do all your shopping around and searching within a set period of time, and for a single “item” at once.

Avoid Credit Cleaner Scams – A credit cleaner company typically offers a way of improving your credit score. The legitimate ones do it by fixing reporting errors and removing or changing defunct loan company addresses and contact details. This can definitely go a long way to improving your score, but the market is flooded with scam companies that will try to sell services that involve all sorts of dubious practices. The vast majority are fraudulent. Do your homework.

Identity Theft Will Harm Your Score – Last but not least, protect yourself against identity fraud. It’s actually possible to hire a reputable company to protect your credit by “freezing” it from any lines of inquiry until you give the go ahead. A stolen identity can wreak havoc if left unchecked for even a short period of time.