Seven Top Tips to Help You Rebuild Your Credit Score

Seven Top Tips to Help You Rebuild Your Credit Score
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    If your credit rating is poor, then you might be having a hard time when it comes to money.

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A poor credit rating is usually caused by a failure to repay your debts on time; however, it can also be caused by a number of other factors, including having several lines of credit in your name, missed or partial payments, or mistakes made by creditors.

If you are struggling to borrow money or even finding it difficult to get a checking account, this could be down to a poor credit rating. Thankfully, there are several things that you can do to improve your credit rating and make financial management easier for yourself. We’ve listed some top tips to help you start to rebuild your credit rating.

Tip #1. Repay Your Debts:

When you repay your debts, your credit rating will automatically be improved, even if only by a small amount. The best thing to do is go through the money that you owe to creditors and determine if there are any debts which can be paid off in full straight away.

For example, smaller debts, or debts that you have been paying off for a long while, may only have a small amount left to pay and therefore you could come to a settlement agreement with your creditor to clear the debt off completely. Even if you are unable to afford to pay a debt in full right now, it’s a good idea to get in touch with your creditor as they may be able to offer you a discount if you are able to pay off a bulk of the amount.

Tip #2. Pay Your Bills on Time:

Did you know that it’s not just your debts that can affect your credit rating – your household utility bills, rent payments, and cell phone payments can also impact your credit score each month. If you are late with paying a utility bill or behind with payments, then this can also cause your credit score to fall and make it more difficult for you to obtain financial products in the future. So, a simple step to improving your credit rating is to set up automatic payments from your account to pay all your household bills, so that you never forget to pay them again.

Tip #3. Avoid Borrowing Money:

Although some amount of borrowing can be good for your credit score if you are able to manage it well, it’s important to avoid borrowing any extra money if you are currently in a situation where you’re struggling to make repayments to your current debts and your credit score is suffering as a result.

One exception that could be made here is in the case of borrowing a debt consolidation loan, which you can then use to repay your existing debts, leaving you with just one line of credit to repay each month – a much easier and more manageable situation than several lines of credit to deal with.

Tip #4. Speak to the Experts:

If you are seriously struggling with your credit score and are unable to make any improvements to it, even though you’ve been trying for a while, then it could be worth getting in touch with financial experts who are able to offer some help. Credit repair companies are there to help people like you better manage their finances and improve their credit rating whilst getting rid of debts and enjoying more financial freedom once again. See this review from CreditRepairCompanies.com to discover more about what they can do to help you today.

Tip #5. Consider a Debt Management Plan:

If you have more debts than you can handle and are struggling to make the repayments in full and on time each month, then a debt management plan could be the best option for you. There are several companies and charities which can help you with setting up a debt management plan and getting in touch with your creditors to come to a reasonable agreement on how much you can afford to pay them each month. Although getting into a debt management plan will not enable you to improve your credit rating quickly, it will help you to pay off your debts and eventually this will help your credit rating to climb back up to a healthy level.

Tip #6. Speak to Your Creditors:

If you are in a lot of debt, then your creditors are probably the last people that you want to speak to. However, avoiding getting in touch with your creditors can cause some serious damage to your finances; especially your credit rating.

If you are unable to pay and your creditors do not hear from you, then they will likely just assume that you’re avoiding paying, in turn, this could lead to more charges on your account and serious marks against you on your credit score. In this situation, the best thing to do is get in touch with your creditors and explain to them the predicament that you are in. You may be surprised – most of the time, creditors will be more understanding than many people expect and more than willing to try and come to an agreement that helps you to pay off your debts without struggling.

Tip #7. Check Your Credit Score:

Lastly, bear in mind that a poor credit score could be affected by mistakes and errors in reporting your borrowing and repayments. So, it’s important to regularly check your credit score to ensure that everything is being reported correctly. If you suspect that your credit score is suffering as the result of an error, then it’s important to get in touch with the creditor in question as quickly as possible and rectify it. Because of this, it’s a good idea to keep records of all your repayments as evidence for any disputes that you may have. You should be able to easily find details of your credit repayments on your banking statements.

Did these tips help? We’d love to hear from you in the comments.

Consumer Tips reference:

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Last update on 2017-10-19 / Affiliate links / Images from Amazon Product Advertising API

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