It’s so easy to spiral into debt. All it takes is losing your job, getting sick or being forced to take a pay cut and those financial commitments that you could easily handle become unmanageable and you start to get behind. It really can happen to anyone, so you shouldn’t feel ashamed when it happens to you. But, once you start to get things back on track, you might want to start putting some serious effort into rebuilding your credit score.
Your credit score is really very important because it is that, to a large extent, which determines whether you’ll be able to get a mortgage or bank loan in the future. Luckily, it’s not too difficult to do.
Here are some tips to help you send your credit score through the roof even if you’ve had money troubles in the past:
Check Your Credit Report
First thing’s first, check your credit report so that you can get an accurate picture of yo5ur current debts and how much work you’ll need to do to turn things around. There are a number of credit bureaus that will allow you access to your report for free, so use one of these rather than a paid option.
While you have your credit report, it’s worth checking that all the information on there is accurate, because sometimes credit companies make mistakes and you’ll be saddled with someone else’s poor credit history, dragging your score down through no fault of your own. If you do spot a mistake, notify the company immediately, and they should help you get it removed from your record.
Pay Down Your Debts
Now it’s time to get down to it. Start diverting as much of your money as you can to paying down your debts. Ideally, you should aim to get it down to a level where you’re only using around 30 percent of the credit available to you if you’re serious about boosting your score.
Pay All Your Bills on Time
What many people don’t realize is that your bill payment record affects your credit score, so if you’re the kind of person who doesn’t always pay your bills by the due date, really make an effort to change that, and you will see things improve over the next few months.
Take Out a Loan
It might sound strange, but if you’ve accrued bad debts in the past, taking out loans for people with bad credit and paying them back on time can help you to repair your credit score by showing lenders that you’re more responsible with your debts now. If you still have debts you’re paying off; you don’t need to do this – just work on paying your outstanding debts off, and you’ll be good.
Pay in Cash
For the most part, while you’re trying to improve your credit score4, you should avoid adding more debts to your credit cards, so always take cash with you and leave your cards at home as much as possible.
Have you successfully rebuilt your credit score? How did you do it?