Your credit rating affects the way that you are able to build your life. Opportunities to purchase a new car, secure a small business loan and buy a house are all dependent solely on credit. A high credit score can result in getting a lower interest rate on new loans, while a low credit score can completely deny them. It’s important that you know how to easily improve your credit. The first and most important step is finding your credit score. This will give you a starting point and allow you to monitor your progress. Once you know your rating, it’s time to start the credit repair process. Creating a monthly budget and payment schedule will help easily improve your credit score with time and dedication.
Know Where You Stand: Your Credit Score
The Fair Credit Act clearly states that you have the right as a consumer to know what is on your credit report. You must be told what information has been used against you, what’s in your file and your overall score. Surprisingly, only 35% of consumers have checked their credit in the past year, according to the FINRA Investor Education Foundation. This means that the majority of consumers are entirely unaware of their credit rating. They may be getting denied opportunities that otherwise may have been approved. Exercising your consumer rights is imperative to improving your credit score.
Obtaining your credit score is the first step in improving your credit. Your credit history will outline every positive and negative transaction that has been reported to the credit agencies. This gives you a step-by-step blueprint for getting out of debt and improving your credit score. You can easily find your credit score and history here. After you have reviewed your credit report, you’ll be ready to start improving your credit.
Create A Budget and Payment Schedule
With a recent copy of your credit history in hand, you’re equipped to start improving your score. Now you know every negative transaction, which company is reporting it and how much is owed. Begin by ensuring the accuracy of your report. Companies can make mistakes, and any incorrect information can be disputed. Once every transaction is accurate, you can begin creating a budget and payment schedule:
- Add up all of your income and monthly expenses.
- Decide how much money is left over after all non-debt bills are paid.
- This amount can now be dedicated to your debt payments.
- Pay off your highest interest loan first.
- Ensure that you maintain minimum payments on the rest of your debt.
- Set up payment reminders to ensure all payments are made on time.
- Reduce using credit cards and other lines of credit as payments are made.
It takes time and consistency to improve your credit. By maintaining your budget and payment schedule, all companies that you are associated with will report on-time payments to the credit agency. This information will begin to outweigh negative transactions and the amount of debt owed will decrease. In no time at all, you’ll start to be approved for new lines of credit – such as that new car or dream home.