Bad Credit Score - 7 Ways to Fix it Fast

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Bad Credit Score - 7 Ways to Fix it Fast A bad credit score can be very costly. It can prevent you from securing a much needed personal loan such as a new mortgage, an auto loan or maybe a credit card. Further, if you are able to qualify for a new loan, with bad credit you will like be charged a higher interest rate. Bottom line, a high credit score is always better than a low score. If you currently have a low credit score, follow these seven simple steps to improve it quickly. Get Your Credit Report & Score - To repair your credit, you first have to know where you stand with creditors. What does your credit report entail and where is your current score relative to the "good" credit score benchmark of 650? Understand Your Current Financial Situation - With your credit report in-hand, you can now see exactly where all of your debts are, e.g. credit cards, home loans, student loans, and/or auto loans, etc. Add them all up to get a sense for your total debt obligation. Next, add up all of your minimum monthly payments required to service your debts to determine if you have enough monthly income to cover the payments. Create A Budget & Payment Schedule - Now that you know how much you owe each month to pay for your minimum payments, create a budget to ensure you are allocating at least enough cash to pay for your minimum payments but ideally some extra so you can start paying off your loans faster. Make note when all of your monthly payments are due in a calendar to make sure you never overlook a payment. Start Consistently Paying On Time - With a clear picture in hand, along with a monthly budget and payment schedule, simply start paying ALL of your bills on time. This is critical and a must do in an effort to quickly improve your credit history. What's more, paying on time will ensure you are not charged additional "late fees", which hurt your credit score and make it unnecessarily difficult to get out of debt due to the fact that you are going backwards as late fees start to add up. Pay Down Existing Debts - As mentioned earlier in step three, make an effort to pay more than just your minimum payments each month. This will not only help you pay down your debt quickly but it will help potentially save thousands in interest fees. Also, a credit report that shows a history of quickly and consistently paying down debts helps improve your score. This also frees up available credit and this is another positive factor with your credit score. Keep Your Credit Cards Active - Once you pay off a credit card balance, do not close the account. You do not need to continue using the card if you prefer not to, as part of a money management strategy but leave the accounts open to show a longstanding credit history with specific lenders and to show additional available credit - both of which positively impact your credit score. Give It A Little Time - Taking action on all of the above steps can be completed in very little time. However, there are no short cuts when it comes to demonstrating consistency, which all potential lenders will want to see. After about six months of making all of your payments on time while even paying off any additional debt you can afford, you should see a very positive impact in your credit score.

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