It’s extremely easy to get lost under a pile of debts when those debts add up faster than you can make the money it takes to pay them down. Making consistent interest and principal payments is key to keeping debt down, but that becomes impossible when you don’t have the income you need to address the issues. Every time you miss a payment or you make a payment late, your credit score suffers. The lower your credit score is, the harder it will be for you to attain financing you may need later in life. Are you trying to get a better credit score, but it seems that achieving that better credit score is an incredible feat? Keep on reading for more information about the best tips out there to make that better credit score a reality!
What Exactly Is A Credit Score?
A credit score determines your creditworthiness and it’s the starting point that lender’s base their decision to work with you or not off of. All of your payment history, loans and debts go into your overall credit score. Fortunately, there are things that consumers can do to rebuild their credit scores and make their credit scores more desirable to lenders.
The following tips should make your process to build a better credit score that much easier:
- Pay more than the minimum payment. If you can, you should make it a habit to pay more than the minimum interest payment that you owe. Credit bureaus pay attention to how long it takes a borrower to pay back their debt as well as the amount of debt that they have. There’s no telling just how much paying more will affect your credit score, but paying down your payments more quickly will without a doubt make you look very good.
- Have a plan ready to execute. Some people get so overwhelmed by the fact that they have substantial debts that they wouldn’t believe that a lender would be willing to work with them to revise their payment plan or even erase some of their debt. Negotiating with a customer directly is easier than getting a credit bureau involved or losing the money altogether if the customer was to go through with a bankruptcy. You might also be able to come up with your own payment plan and as long as the lender is okay with it, you can get it done.
- Make the switch from credit to debit. Credit card debt is not your friend when you’re trying to get a better credit score. A debit card gives you a lot of the same freedoms as a credit card, but with different restrictions. Debit is different from credit for the fact that you must deposit money into an account and that is where you get the charge. You don’t have any bill to deal with, and you can only spend what you have available in the account. Using a debit card instead of a credit card can help towards achieving that better credit score.
- Say “no” to in-store cards. In-house credit cards are almost worse than regular credit cards. Sure, they come with special perks that pertain to the store like free merchandise and discounts, but having more credit cards open in your name will only further bring your credit score down. In addition, if you have high balances on all of your credit cards at once, you’re potentially just adding more debt to your total accumulation. Consolidating your debt would be a good idea if you have several credit cards open with high balances.
- Add your input to your credit report. There’s a good chance that you will run into some errors when you’re reviewing your credit report. There might be a particular loan or something of the sort that you’ve paid off that isn’t reflected on your credit report. You’ll have to provide some documentation, but you can leave comments on your credit report to have errors fixed. If you want to be more direct, you can give the credit bureau a call and have them address the error more expeditiously.
It should be stated that a low credit score does not mean the end of the world! Being disciplined, responsible and following the rules you’ve set for yourself are the most important principles to mind for becoming financially stable and earning a better credit score. It’s very hard to function in a situation that has you struggling under the weight of your financial world, but you can make it through the hard times. Exhaust all the options at your disposal to come out on top! Have very clear communication with your credit bureau and address your bills when they’re due. In the end, you can defeat your debts and live to tell the story: take control of your life and finances and get that credit score back on the right track.