Fix Your Credit Score from bad to good by US Home Loan News


How to Fix Your Credit

One of the first things a lender does when deciding to approve or decline a credit card, loan or mortgage application is to check your credit score. This is essentially a three digit number (typically 300-850) which gives a reliable indication of your credit worthiness at the present moment in time.

Even though there are several companies to obtain your credit score, most people are likely to have a score in the region of 600-700 or more. Any credit score of 700 is rated as good, while those with a score of 750 or more will have an excellent rating and be in line to get the best terms when it comes to getting approved for a loan. However, if you are presently stuck with a low credit score, the prospect of getting approved for credit is much lower, and even if you do, the terms and rates are certain to be less favorable.


How to fix your credit score

Fortunately, with the right action taken, it is possible to reverse the negative credit score. But, it isn’t a quick and simple fix. It will not happen overnight. Building a solid credit history that is attractive to lenders will take a little time. It will involve carefully checking your finances and pinpointing areas that are causing problems and cutting out things that lead to overspending.


Check your credit

The first practical step to take is to request a copy of your credit report to see your credit score and other information held. This will give a clear impression of where you stand and lets you know the areas of your finances that need the most attention. Plus, it doesn’t have to cost to obtain a copy of your credit report. You can simply request a free copy (once per year) from the three major credit bureaus – TransUnion, Equifax and Experian. Also, there is the option to visit and view your credit scores.

You will find that it benefit to apply for your credit report from all three credit bureaus because there are slight variations in the information held. Some of this information can be very important and have an influence on your scores. A loan or mortgage lender may look at any of the credit reports, so it helps to ensure all issues are addressed and accurate.


Take the necessary action

After reviewing the credit report, you want to take the appropriate action to ensure your credit score is as kept appealing to potential lenders.

Try to keep an eye on your credit score to ensure the debt on loans or credit cards are kept within an acceptable range. It will help to pay down debt on the accounts with high utilization (amount of credit used). This is a very effective step to keep the credit rating in good standing. A further point to consider is the credit age, which is a key element of arriving at a credit score. It helps to limit the number of accounts closed at any one time.

With a little time and effort it is certainly possible to build a positive credit history that makes it easier to take on a new line of credit when needed.