A bad credit makes everything difficult and more expensive. If you are currently suffering from a bad credit, it is very important to repair it right away. You see, the better your credit score is, the more opportunities you can get.
Although there are professionals who can handle credit repair for you, it is still you who can help yourself recover from your current financial situation. To save yourself money, just do the repair yourself.
Here are 5 steps to follow:
Request a credit report.
Before anything else, you need to request a full credit report first in order to know your current situation and. We are all entitled to one free credit report a year. This way, you also get to see all the financial mistakes you did that contributed to your bad credit.
Analyze the credit report.
Once you have your credit report on hand, analyze it and check for any discrepancies. Maybe they have listed major purchases that you didn’t make? Or a credit card that you don’t even own? Or payments that are incorrectly reported late? Highlight them one by one so it’s easier to back-read. In case of an error, make sure to gather all supporting documents and report it right away.
Reduce debt on your credit cards.
You need to set a certain amount each month for credit repair. Prioritize the accounts that are already in danger like almost becoming past due and work on making these accounts current. Paying bills on time can make a big change in improving your credit score.
Stop using your credit card.
Don’t add salt to the injury. Lock up those credit cards at home! Your goal is to lower your balances so just use cash for irregular purchases instead. Cancelling your credit cards isn’t the solution because this won’t cancel your debts anyway… it will just hurt your credit score even more. But in case you decide to really do it, choose the ones with the shortest history.
Change your spending habits.
I hope by now, you’ve already assessed all your mistakes and learned from it. Commit yourself to changing your spending habits and work towards financial freedom. Be wise and practical when it comes to spending and avoid unnecessary purchases. During this time, it is very important to distinguish your wants from your needs.
Make sure to create a budget too and stick to it!