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Surprising Ways to Fix Your Credit

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No matter how overwhelming it might seem, fixing credit shouldn’t be that hard. In fact, you’ll be surprised that the best and most effective ways to give your credit a makeover are very simple. 

Check your credit report for errors. It couldn’t be reiterated enough that in order to fix your credit, start with your credit report. Look for small errors such as credit inquiries, incorrect dates, and credit history pulled without your permission, as well as more serious errors as unpaid accounts that don’t belong to you and credit limits which are incorrectly reported. Disputing these errors alone can cause significant improvements on your credit score.

Add missing accounts. After disputing errors on your credit report, the next thing you would want to look for are missing accounts, which can have positive effects on your credit. This can be a cable or a landline service for which you have subscribed in the past but you don’t see anywhere on your credit report. If this occurs, contact the company or service provider and ask them to report your payments to the credit bureaus to have your credit report updated.

Do not pay on your due date. Paying on your due date will not hurt, but paying earlier can have an even more positive effect on your credit score. When you pay before your due date, that is the time when your balances are not reported yet, so when the report comes your credit card will show a zero balance.

Get rid of your highest credit card balance. Many customers tend to pay off the cards with the lowest balances first, because it sort of give them the encouragement for accomplishing something, compared to tackling on bigger debts which are hard to eliminate. However, by paying off your cards with the highest balances, not only can you save more money on finance charges, but it can lower your credit utilization, which is an important factor in calculating your credit score.

Keep on using your plastic cards. Even if you’ve had bad experiences in using your cards before that caused your bad credit, you should not refrain from using them, and most definitely don’t cut them. If your goal is to improve your credit, you have to keep them active, especially those cards with balances and your oldest credit cards. If you’re worried about history repeating itself, charge only small amounts and pay them in full every time. This can help you regain control while building credit at the same time.

Request for a credit limit increase. As mentioned above, credit utilization is one of the factors that determine your credit score. Credit utilization is the ratio of your balances to your credit limit, and the more you keep your balances below your limit, the lower your credit utilization will be, and the better it will be on your credit score. To help lower credit utilization, you can ask for a credit limit increase. Be mindful however of charging too many purchases on this higher-limit card.

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