Your credit history is extremely important and it can significantly impact the amount of money that you pay in interest now and in the future. If you have credit issues on your credit report, getting these issues taken care of in a timely manner can improve your financial situation.
Timely Payments
One of the best ways to improve your credit is to start making payments on time. Your creditors will report late payments to the credit bureaus. If you have several late payments, it will begin to negatively affect your credit score. When you start making on-time payments, it could take several months for your credit to start improving. Within six months, you should start to see your credit score improve from this action. If you make another late payment, you will have to start all over.
Removing Credit Report Issues
Another way to improve your credit is to fix mistakes on your credit report. When you review your credit report and find something that is not accurate, contact the credit bureau and your creditor to have it removed. Both the creditor and the bureau will require written communication and proof of the mistake. When you go through this process, it will typically take up to 90 days to have the mistake corrected. If it was a legitimate error, the credit bureau should be able to remove it completely.
Rapid Rescore
A service that you could choose to get involved with is rapid rescoring. This is a type of service that is often used when trying to secure a mortgage or auto loan. Your lender can contact a rapid rescore service to help you raise your score quickly. These companies have relationships with credit bureaus and can work with them to change information on your credit report in less than a week. You have to pay them a fee and they can get mistakes fixed on your report.
Bankruptcy
If you go through a bankruptcy, it can have a drastic effect on your credit report. Your credit score will be lowered significantly. The bankruptcy will remain on your credit report for at least 10 years after it becomes final. This means that you will have to live with the bankruptcy on your report during this time, but you can begin rebuilding your credit immediately. By getting a secured credit card and making on-time payments, you can undo some of the damage within the first year.
Paying Down Balances
Another issue that can negatively affect your credit is having high credit account balances. If you have a credit account balance of more than 30 percent of the available balance, credit bureaus will look at this negatively. Paying down the balance can improve your scores within 90 days. The amount of time that it takes to pay down the balance will depend on how much debt you have and your level of expendable income. Getting your balance below the 30 percent threshold could take years if you have a large amount of debt.
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