Do you have a blemished credit report due to a series of financial misfortunes? If so, then you're not the only person in this country. Several people have poor credit report due to various reasons. Unfortunately, this report can determine if you can qualify for a line of credit and how much you'll pay on the interest rate to the creditor.
Check out the do it yourself credit repair steps and improve your financial life gradually.
You're already suffering for the mistakes done in the past. You'd obviously hate to suffer for the mistakes you haven't done. Around 70% of the credit reports contain errors in them. Get a free copy of your credit report and take steps to fix the errors that are hurting your score.
If you've missed several payments, then contact your creditors fast and try to work out a repayment plan. You can even consult a debt consultant to arrange a payment plan on your behalf.
Don't close your old accounts as they have a significant impact on your credit score. Old accounts make an important part of the length of your credit history. If you're having problems in paying interest on a particular credit card, then talk with the creditor to reduce it.
Get a secured credit card to rebuild your tarnished credit. You can get one after depositing a specific amount at the bank.
For instance, you deposit $500 against the card. This means your credit limit on the card is $500. You can make purchases worth $500 only. Once the amount is exhausted, you can replenish the amount and start using the card again. This helps you build positive payment history as there are less chances of making a default.
A higher credit-utilization ratio is bad for your credit. Try to minimize the ratio to less than 30%.
For instance, you've 2 credit cards. You've one credit card with a huge credit limit but small outstanding balance. You've another card with small credit limit but huge outstanding balance. What you can do is, transfer the debt from the card with small credit limit to the one with high credit limit. The debt won't increase the credit utilization ratio by a great extent.
Usually, hard inquiries are triggered when you apply for credit cards or loans. Hard inquiries hurt your credit. So, try to avoid applying for too many credit cards and loans.