You have credit score issues and here you will find 4 easy tips to fix it.
You have to grasp first how your credit worthiness works. The Credit Reporting Bureaus look at your borrowing history, your payment history, your debt levels and type of credit you have. All these factors are then summarized to give you a proper credit score.
Lenders and banks then go through your score to check how you manage your financial obligations in the past. Higher the score better is the reflection of your overall handling of your borrowings.
If you want to fix your credit score issues, here are 4 easy tips that can help you to improve your score.
1. Get a Free Copy of your Credit Score
First job you have to do on fixing your credit score is to know what it looks like today. Contact all three Credit Reporting Agencies and get a free copy of your credit score. See if there is any discrepancy in your total score among these agencies.
You should check for all credit enquiries that you have made are shown there, like any liens or defaults, judgments, unpaid payments, or any other issues.
Through this report, you will come to know about the factors affecting your current credit score. This will make the things easier for you in fixing credit issues.
2. Remove Incorrect Listings
You should look at those entries that weren't made by you. This includes the listings of the people with similar names or any fraudulent listings by someone using your identity.
Also check for the entries, which are flagged 'unpaid' or 'past due' by the lender and you are sure that you have paid them in full.
3. Clear up Past Dues
Once you default on repayments it can be difficult to make up. This creates a negative marking where you are charged with interest rates, penalty, and any overdue fees, which makes it even tougher to make up.
If you want to fix credit score issues, then you have to have the ways to pay up due debts and pay them as soon as possible.
Think of a debt consolidation program that offers a lower interest rate to clear off your higher interest payments.
If these options are not available, then you may think of renegotiating for an appropriate payment plan with your lender to level your status.
4. Payment Plan Negotiation
If you are devoid of any other means to raise cash to clear overdue payments, then contact your creditors and negotiate a payment plan. Ensure that you have opted for a realistic payment plan and you do not default again.
Also check while negotiating whether they can revise interest downwards and make any revision on the penalty fees or charges.
When you have paid your past payments, call your lender and see that they clear negative listing on your report.
It is always better to have a paid default listing to an unpaid debt listing.
Do you know that your repayment history makes up for 35% of your credit score? So focus on this aspect and improve your score.
Stick to your plans and continue to work on paying your debt.
These are the 4 easy tips on fixing your poor credit score.