A Three-Step Plan to Fix Your Credit Score

You’ve applied for credit. You’ve been denied. And now you find out it is because of a low credit score. You had no idea that your credit score was low, and now you want to fix it. The good new is that it is possible to fix a low credit score. However, the fix is usually not something that can be accomplished in just a matter of days. Certain decisions and actions have brought the credit score down over time, so it is understandable that it will require certain decisions and actions to fix it. Following three simple steps should enable most consumers to fix their low credit score.

Step one – Pay your bills on time. This sounds like such a simple thing, but it really does make a difference. Timeliness in bill paying can impact up to 35% of your credit score. Being late on just one payment can have a negative impact, even when the payment was only a couple of days late. Conversely, paying on time has a positive impact. Even if you can only pay the minimum each month, pay it and pay it on time.

One way to ensure that bills get paid on time is to set up automatic payments through your bank. If automatic debit is not available to you or if you worry that the funds will not always be available on the same date each month, put a reminder on your calendar or set a mobile phone alarm to alert you. Do whatever is necessary to get your bills paid on time each month.

Step two – Pay off debt. Financial experts suggest starting with revolving debt. Revolving debt involves things like credit cards. Paying off credit cards will fix your credit score by reducing the percentage of your available credit that is being used. After paying off all credit cards, you can begin to tackle other debt like car loans. Once something is paid off, keep it paid off. However, do not cancel the accounts. Keep them open so that the amount of available credit that you have is high and the amount that you are utilizing is low.

Step three – Dispute errors. Making sure that there are no errors on your credit report is one of the fastest ways to fix a low credit score. Paying bills on time and paying off debt are the long-haul fixes that you can do on your own. Getting a credit repair service to correct erroneous aspects of the report will raise your score as soon as the problems are removed. A credit repair company can give your score the boost it needs in the short-term so that you can focus on the long-term results.