According to a recent survey, almost forty-four percent of Americans have a FICO score that is considered to be bad (350-649) or fair (650-699) by most lenders. If your overall credit score falls between this range, you might be wondering how to rebuild credit fast. Remember, a bad credit score can make it tough for a person to qualify for credit cards or loans. Even if you get approved for one initially, it might typically be at a higher rate of interest which further translates into higher costs.
Furthermore, a low credit score can cause a huge impact on your ability to pay bills, rent an apartment, get a cell phone contract and even in some cases, land a job. However, the good news is that there are many proven methods by which you can rebuild your credit quickly. Read on to know more if you are thinking about how to rebuild credit fast.
How To Rebuild Credit Fast: Step By Step Guide
- Try Being Committed To The Change: Most of the peoples who are suffering from a bad credit score are in that situation because they have fallen into the pit of some really bad habits. Since all these bad habits are really hard to break, the person needs to make a stand in order to allow a change. Start by being honest with yourself about why your credit score is in trouble. If you have lowered your score by bad habits of spending, then firstly you need to resolve to change your ways. Try deciding that from now, you are going, to be honest, and will pay your bills on time. Remember getting a good credit score is like going onto a diet in order to improve your health.
- Don’t Forget To Review Your Credit Report: In the first place try ordering a current copy of your credit report from all the three bureaus such as TransUnion, Equifax, and Experian. Now after receiving the copies, look closely throughout the credit reports for any sort of payment related errors- late payments that weren’t actually late, accounts that weren’t yours, accounts that were included in bankruptcy. You might also come across credit reports that are costing you many valuable points unfairly. Whatever be the reason, you need to understand all the problems before dealing with them.
- Dispute All Errors If Any: If you find any errors in your credit report, try contacting the reporting agency and take advantage of all the laws that help in protecting customers to get all those mistakes removed from the credit history. Furthermore, you need to make sure that the credit limits are reported accurately. If your credit report shows a lower limit of credit, try asking your card issuer to update it correctly with the credit bureaus. Also, it is suggested to avoid disputing any correct negative items as that can well come back as verified.
- Build A Budget And Stick To It: Remember if you are thinking of how to rebuild credit fast, any sort of plan to rebuild your credit damage can surely fail if you don’t address the actual root of the problem. In most cases, the main cause simply boils down especially due to lack of any budget. Try chalking out a realistic budget and not an idealized one. In case your overall budget doesn’t reflect your actual debts or lifestyle, it is somewhat useless. A good budget can help you in repaying debts and can keep you away from overextending yourself in the distant future.
- Try Cutting A Deal: Try to ask your credit card companies to waive off all your late fees, especially the ones that can tarnish your credit history. Typically most of the credit card collection agencies offer what’s known as pay for delete. In this scheme, they mostly agree to remove the collection account from your credit report especially if you satisfy the past due balances. Try to get the agreement in writing from the credit agencies before you make any sort of payment. In case the collection isn’t removed from the report, it can still continue to hurt your credit score no matter if it’s paid or not. Also try to send a goodwill letter, which can also cbe used as a pay for delete letter. Here you can request the collector or the creditor to remove a paid account from your overall credit report out of goodwill. In these cases, you can briefly explain why you have actually become so late. Remember there’s always a chance that whoever receives the letter might feel generous and update your account.
- Always Make On-Time Monthly Payments: You must always make sure to pay off your payments on time each and every month. Remember your payment history makes up almost thirty-five percent of your overall FICO score. In case you find it hard to remember all your due payment dates, consider placing auto-debit for your credit bills with reminder dates such that it reminds you about the due payment date and then automatically makes the payment for you.
- Finally, Mix Up Your Credit Choices: Finally, the best way to find out how to rebuild credit fast can be done by mixing up all your credit choices instead of just focussing on using your only credit card. Remember making use of different types of credits can help in boosting your score fast and easily. For instance, if you are planning to buy an appliance, instead of straight away using your credit card, you can try considering a personal loan instead. This technique can easily portray how responsible and effective you are in managing credit.
Sometimes the process of credit build-up can be long and winding, and it isn’t something that can happen overnight. If you are having any sort of future plans to boost your finances by utilizing home rents or utility bills, you can try using our service.
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