A poor credit score might make it tough to manage your finances. Loans and mortgages are significantly more difficult to get. You are also unlikely to be qualified for credit cards with low-interest rates and perks. If this sounds relatable, there are no worries, as you can fix your credit yourself – here is how!
Step 1: Get to Know Your Credit Situation
First of all, you need to understand what is actually wrong with your credit. We recommend asking for a report from well-renowned agencies like TransUnion or Equifax. Under the Fair Crediting Report Act, they are legally obligated to provide one free report each year. This way you can shine a light on your credit situation.
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Step 2: Reports Overview
Most importantly, look for incorrectness in your credit reports. These can falsely lower your score, so you can straighten out the issues. Things including personal data, accounts you did not open, incorrect account balances should be removed and repaired as soon as possible.
Step 3: Work Out Your Current Debts and Credit
When poor credit is the problem, you should avoid adding to your bills and financial problems. It might be difficult to confront your situation and all too tempting to avoid your creditors. Sadly, these factors can ruin your financial situation. If you want to fix your credit yourself, try managing your existing debts with your creditors. They might have the right tools to help you even the score.
Step 4: Understand How Negativities Affect Your Score
There is a handful of negative items that can have a strong impact on your credit score. Unfortunately, the worst negativities have bad influence for many years:
- Bankruptcy: 7-10 years
- Late car payment: 7 years
- Foreclosure: 7 years
- Unpaid tax liens: 10 years
- Paid tax liens: 7 years
Step 5: Fix Your Credit By Building a New One
When repairing your credit score yourself, you need to build a new one and do it wisely. People with low scores can open a credit card to create good history. Another great option is becoming an authorized user of someone else’s credit card account. If you take this step seriously, you can proceed to use a credit repair software tool, which is very helpful.