Bad credit isn’t something that happens overnight and it’s not exactly something you can fix quickly either. With a little time and a whole bunch of resolve, though, you can take steps toward improving your score. These three basic ideas will help you change your course and send your credit score in the direction you want – up!
- Pay your bills. One surefire way to make your credit score drop is to be late on payments or miss them entirely. If you’re behind on your payments, you need to catch up before you can expect your score to get better. Once you’ve caught up, set yourself up to never be late again. Whether you use a paper calendar, a reminder app, or some other method, make sure that you continue to keep current so you can build up that stellar payment history.
- Reduce your debt. That seems obvious, right? But let’s get more specific: reduce your higher balances so you are using less of your available credit on each card. Not only is the amount you owe important, so is the amount you owe in relation to the available credit. Your goal should be to use no more than 30% of the credit available to you on any given card. It’s even better if you can use less than 10% of the limit. Your credit score will go up as you lower the balance under that desired utilization rate. Figure out what that number is and work to get closer and closer to it across all cards.
- Apply for new credit. This may seem like the opposite of what you need to do, but securing new credit can sometimes help your score. Here are two examples:
- Try a secured credit card. If your credit score is low because you haven’t had many credit cards, you may be unable to get one. A secured credit card, one where you put up a cash deposit of typically $200 to $500, can help you build a positive credit history by paying this card on time.
- Apply for a car loan. Auto loans for those with bad credit are available. Like with the secured credit card, as you make timely payments to repay that loan, you’ll be building a better credit history and boosting your score.
While none of these steps are necessarily easy to implement, they aren’t hard to understand. Your credit score is a formula based on past behaviors. Making some changes to those behaviors and creating a new story about your credit and ability to pay back loans will go a long way to boosting your score.
If you need auto financing but your credit is keeping you from getting approved, CreditYes can help! We can match you with a dealership in your area that will be with you every step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!