If your credit score has taken a beating, perhaps due to a divorce or job loss, or even a bit of carelessness, all is not lost. There are some steps you can take to help bring your score to a level where you can get credit at reasonable interest rates again. Keep in mind that there is no quick fix to repair your credit. It will require focus and consistent effort on your part.
Make Timely Payments
If you're in the habit of paying bills late, start focusing on paying them when they're due. According to Experian.com, consistently late payments are a major factor in lowering your score. If necessary, implement some sort of reminder system such as organizing your bills in a file that arranges them by the due dates.
Don't Move Debt Around
Experian.com also suggests focusing on paying your existing debts down instead of moving them around by consolidating them with other debts. This won't reduce your debt, and you'll have fewer open credit accounts, which can actually hurt your score. Concentrate on paying off the debt with the highest interest rate first, then move to the next-highest rate and so on.
Don't Apply for New Credit
Whenever you apply for a new loan or credit card, it shows up on your credit report and tells lenders that you're seeking additional credit. If your goal is to improve your credit score, it's better to use existing credit sources if you need additional credit. If you manage your existing accounts responsibly, over time your score will improve.
Clean Up Your Credit Report
Clean up your credit report to remove any inaccuracies that are keeping your credit score low. Obtain a copy of your credit report from each of the three major reporting companies, Experian.com, TransUnion.com and Equifax.com. If you find any discrepancies, you should contact the reporting agency that published the report, and you may also have to contact the company that reported the item.
Get a Secured Credit Card
If you need a credit card but your credit is such that you don't qualify for an unsecured card, apply for a secured card. With a secured card, you pay a deposit that acts as collateral for when you use the card. By using your secured card responsibly and by making timely payments, you'll be able to boost your credit score.
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