Fixing Your Credit Rating Might Be Easier Than You Think

If you want to make sure that you have all of your financial affairs in order, there are a lot of things that you are going to need to think about. One of the main ones is that your credit rating is as good as it can possibly be. A lot of people have poor credit scores, and it’s very common to have this at least some of the time. But if it is proving a problem, perhaps because you are struggling to get any decent rates on borrowing, then it’s something you’ll want to look into fixing.

And as it happens, fixing it might be easier and simpler than you think. For most people, there are just a few things that they need to attend to which will help them to improve their credit rating, and that is going to be really important to pay attention to. Let’s look now at some of the things you might want to aim for here.

Know Your Numbers

The all-important first step is to make sure that you know your numbers as firmly and as fully as possible. You have to know where you stand to appreciate what kind of improvement you need to make. You are entitled to one free credit report per year from each of the three major bureaus, so it’s important that you make use of these and really get to grips with where you currently stand.

It can be difficult of course to first see this, and you might find that you are a little worried about it. But it’s important, and it’s the only way that you are going to know how to improve it in future. As well as giving your overall score, these reports will often tell you exactly what is bringing that score down, as well as what’s helping it, so you can use that to really make sure that you are going to pinpoint the areas you need to focus on.

Focus On On-Time Payments

If there is one thing that is going to help your credit score more than anything else, it’s probably making sure that you pay your debts on time. Payment history makes up by far the biggest chunk of your credit score, and it’s the one that you are going to need to pay close attention to at first. Even one missed payment can hurt, but if you are consistently paying on time you’ll quickly start to build trust with lenders.

To help with this, you might want to consider setting up some kind of autopay option with whatever you need to pay. That could simply be a direct debit or a standing order. The point is that you don’t have to think about it that way - you will simply make the payment, and you’ll find that you are going to have a much better record as a result.

Fix Errors

From time to time, the credit bureau will have some information on file about you that is simply wrong. This can happen for all sorts of reasons, but the important thing is to make sure that you correct it as soon as possible. Otherwise, you are going to potentially have a false reading. It can be tempting not to correct the incorrect information, especially if your credit rating is currently good. But in the long run, it’s all going to come out, so you might as well fix it as soon as possible and get a true reflection of your likely score.

One common issue is when you log on to check your score, only to discover that the credit bureau thinks I'm dead. This is an easy fix, but you'll probably want to contact a lawyer to help you out with it. All in all, this is going to be something that you really need to think about, and there are other errors which you might come across too. Whatever they are, make sure that they are fixed so that the credit rating is as true as possible.

Lower Your Credit Utilization

This is another powerful way to improve your credit score. It refers to the amount of credit you’re using compared to your given limits. If you can keep this as low as possible, you’ll find that this helps a great deal too. Ideally you will want to keep it under 30%, but as low as possible is the goal. Even paying down a small portion of a balance can really noticeably boost your score, so it’s quite a simple way to make sure that you are really going to notice a huge difference to your credit rating.

Don’t Close Old Accounts

It can be tempting to shut down a credit card you don’t use, but older accounts can actually help your score. That’s because they show a longer credit history, which is one of the things that creditors will look for if they are considering lending you money. Unless the card has an expensive annual fee, keeping it open will usually work in your favor. So this is something that you are going to want to think about if you are keen on trying to improve your credit rating without even really doing much. The best situation is to have a card open that you have completely paid off and let it sit there.

Be Selective About New Credit

There is no rule that says you can’t open new credit accounts, but you should be selective about which you do open. In other words, make sure that you are not applying to too many, because a hard inquiry gets added to your report when you do - and too many of them in a short period can hurt your score considerably. Apply only when you need to, and make sure you space applications out as best as you can.

Those are just some of the things that you will want to think about when you are trying to fix your credit rating.

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