Credit reports and credit scores give lenders insight into your credit patterns. Having a bad score often indicates you have credit issues and means you're less likely to get approved for new credit. Regardless of the contents of your credit report and your FICO score, you can fix a bad score and become a prime applicant if you put in the work needed.
Importance of Organization
Being disorganized can play a role in bad credit. Statements arrive in the mail, and if you're unorganized, you may forget to write down your due dates or make payments on time. Even if organization isn't your strongest skill, there are ways to ensure that creditors receive their payments by the due date. Opening statements and paying bills as soon as they arrive helps, as does switching to automated monthly payments and having money drafted from your bank account.
Repayment of Balances
Charging items on a credit card and not paying off the balance results in high debts, and high credit card balances hurt your FICO credit rating. Stop viewing credit as a means to acquire every material possession you desire. Practice saving money and then paying for items with cash. Use credit cards as a last resort, and only if you can pay off the new charge in a relatively short period. Start making higher payments each month to pay down balances.
Credit Report Updates
Not every creditor or lender regularly submits updates to the credit bureaus. What's more, creditors can send wrong information to the bureaus. And if this information is negative, your credit rating may drop. Stay on top of your credit report and take advantage of yearly free reports offered through annualcreditreport.com. If you notice outdated information on your report, contact creditors immediately and ask them to update your credit file and delete errors.
Post Bankruptcy
New credit is key to fixing credit after a bankruptcy. A bankruptcy removes your debt obligation. Reversing the effects of a bankruptcy involves reestablishing credit and making better decisions regarding the use of credit. A high interest rate credit card or secured credit card helps you rebuild credit fast. Banks can issue a secured credit card upon receiving a security deposit from you. Another option includes financing a car with a "no credit check" auto dealership.
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