Easy Ways to Fix Your Credit

A low credit score can have many negative effects on your life, including higher insurance rates, higher interest rates and being denied for auto, home and personal loans. Having a low credit score can also have adverse effects on your well-being, as you may feel stressed and overwhelmed. Fixing your credit to obtain a higher credit score can be an easier process than you think.

Pay Your Bills On Time

Paying your bills even a day late can negatively impact your credit score. Transitioning into paying all of your bills on or before their due date will help raise your credit score and reflect positively on you to credit card and loan companies. When it comes time to apply for a home or auto loan, lenders are more likely to give higher amounts with lower interest rates to individuals who consistently pay all of their bills on time.

Close Out Accounts

Having multiple credit card accounts that are delinquent or behind in payments reflects badly on your credit score. Slowly work on closing out newer accounts over the course of several months by paying more than the amount due when possible. It is best to keep your older accounts open as you have a longer credit history built with them than through an account you have only had several months. The fewer accounts you have to manage, the more likely you will be to pay on time.

Avoid Revolving Balances

A revolving balance from an expensive transaction will only continue to accumulate interest as the months go by. One of the easiest ways to improve your credit score and keep your credit in check is to never spend more on your credit card than you can afford to pay in one lump sum. For example, if you need to pay for gas in your car and have the money to do so, charge the purchase to your credit card and immediately pay it off in full. This will build a strong line of credit without ever accumulating interest or revolving balances.

Deny Credit Line Increases

Oftentimes, credit card companies will offer you an increase in your allowed spending limit every few months. These credit line increases are entirely optional and you have every right to deny them. By keeping your credit limit as low as possible, you avoid the risk of overspending on the card and accumulating more debt than you can feasibly afford to pay off.