First, its best to do an analysis on what’s Influencing your credit scores?
Many factors can influence credit scores. Some of the most common credit scoring factors are:
- Payment history — a record that includes the on-time payments you make as well as late or missed payments.
- Credit utilization ratio — compares the total amount of credit you have available to you with how much of it you’re actually using right now.
- Total debt — the total amount of debt you have, including credit cards, loans, collections, and other credit accounts.
- Mix — the types of credit accounts you’re using.
- Age — how old your credit accounts are.
- Hard inquiries — your recent applications for new credit.
- Public records — such as bankruptcies or civil judgments.
The best way to know what factors are affecting your credit scores is to look over them often – and you can check your credit score with a credit monitoring service.You’ll get a list of the credit score factors that are impacting this score the most. If you’re trying to improve your credit scores, you should consider tackling these factors first. Also monitor your credit regularly, which you can do with this type of credit, to keep a close eye on your score, the information in your credit report and your progress over time.
Taking Steps to Rebuild Your Credit
If your credit scores are lower than you’d like, know that change begins with you! The steps that you take to change your credit behaviors are usually reflected as positive updates in your credit scores over time, because the data that goes into your scores is comprised of all the actions you make when it comes to credit.
Pay Bills on Time
- Pay all your bills on time, every month.
- If you have any past-due accounts, bring them current and make on-time payments going forward.
- Consider setting up automatic payments or payment reminders to help ensure you aren’t ever late with a payment.
Think About Your Credit Utilization Ratio
No one wants to max out their credit cards, and creditors don’t like to see credit accounts that look maxed-out either. Your credit utilization ratio compares the total amount of credit you have available, based on credit card limits, to how much of your available credit you’re actually using (your balance). The lower your credit utilization ratio, the better. (Most experts recommend you keep it below 10%.) You can reduce your credit utilization ratio by:
- Paying off credit card debt.
- Keeping credit card balances low or at zero.
- Being cautious when closing accounts. When you close an account, you reduce your amount of available credit, which in turn affects your credit utilization ratio.
Consider a Secured Account
Opening a secured account, such as a secured credit card, can also help build positive credit history and can be a valuable tool if you’re having trouble getting approved for more traditional loans or credit cards. With a secured account, you deposit cash into an account as collateral, and then borrow a percentage of that amount for credit. Your use of a secured credit account is reported to credit bureaus, so as you pay your monthly bill, your good payment history helps build your credit. Opening a new account will create a hard inquiry to your report, too – so make sure that’s something you’re doing sparingly.
Be Careful with New Credit
Opening new credit card accounts, or even just applying for them, can affect your credit scores. Increasing the amount of credit you have available could improve your credit utilization ratio, but only if you have the self-discipline to pay your bills each month. What’s more, every credit card application you make will appear as a hard inquiry on your credit report, and too many hard inquiries in a short amount of time can negatively affect your credit scores. A lender may also see multiple credit card applications within a short period of time and interpret that as a sign you’re in financial hot water and are using credit to stay afloat, or live beyond your means. Lenders generally want to be certain you’re not in danger of overextending yourself financially before agreeing to extend you additional credit.
Get Help with Debt
If you’re struggling to pay your debt, you have options for help, including:
- Credit counseling\repair — A certified credit counselor can help you create a financial plan to better manage your debt.
- Debt management plan — A DMP focuses on eliminating your debt. You’ll have to deposit money each month with a credit counselor who will then use the money to pay your unsecured bills according to a payment schedule the counselor works out with you and your creditors. Creditors may agree to lower interest rates or waive certain fees, but they’re not obligated to do so.
How Long Does It Take to Rebuild Credit?
There is no real quick answer to this question asked by many, everyone’s walk of life is different and because of that it really varies. it can take 1 year or even 3 to 4 years it depends, but overall it will get better and back to great credit.
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!