10 Different Options to Fix Your Credit

fixing your credit

If your credit is on the lower side, it might be time to make some financial changes. About 56% of Americans have bad credit; bad credit can cause you to be rejected for loans or cost extra money in interest. Thankfully, it’s possible to fix your credit on your own. Here are 10 tips for fixing your credit.

1. Get Your Credit History

A report by the Federal Trade Commission stated that one in four people have errors on their credit report. Every year, you need to obtain a copy of your credit history and comb through it to ensure that it’s 100% correct. If there’s a mistake, dispute it through each of the major credit reporting bureaus—Equifax, TransUnion, and Experian.

2. Know Your Credit Score

Knowing your credit score is one of the first steps in improving your credit history. Your annual credit report doesn’t display your credit score, so it’s important to use a service such as Credit Karma to retrieve your score and determine where you should start improving.

3. Monitor Every Dispute

It can take months to resolve a dispute through the credit reporting bureaus. While it’s easy to allow the conflict to work itself out, you need to remain involved until the issue is removed from your credit history.

4. Pay Your Bill

While it may seem obvious, one of the biggest negative impacts on your credit history is a late payment of 30 days or more. Late payments shows up on your credit history for a minimum of seven years and can’t be removed if valid.

5. Watch Your Credit Utilization

Credit utilization is much harder to determine on your own, but some websites like Credit Karma provide it. This score is a percentage of your used credit versus how much you have remaining — the percentage should remain 30% or lower.

6. Use Credit Cards and Pay Them Off

One of the easiest ways to improve your credit is to continue using your credit card even after you’ve paid them off—failing to use a credit card can negatively impact your score. So to avoid this, every now and then purchase something on your credit card and pay it off at the end of the month.

7. Don’t Cancel Cards

It may seem tempting to start canceling cards once you’ve paid them off, but when you cancel credit cards you’re decreasing your available credit utilization score. In the long run, it’s better to leave old credit cards open.

8. Keep Old Debt

There’s good and bad debt. Good debt is debt that you’ve handled and paid as agreed—some examples include a car or home loan. This type of debt shows a solid history, which favorably reflects in your credit history. If you need to purchase another house or car, this report may get you a better loan rate.

9. Use Credit Inquiries Wisely

Any time you apply for a credit card, loan, or even a utility, your credit is reviewed, which shows up as an inquiry on your credit history. Every investigation reflects poorly on your credit report. The fewer the inquiries, the better.

10. Be Patient

Improving your credit doesn’t happen overnight. Sometimes it can take years for your score to become favorable. Disputes can take months to resolve, and if it’s negatively impacting your credit history your score won’t rebound the moment you report the error.