The very thing you need to know is that this isn’t going to be instantaneous. Your cumulative credit score takes into account years of recorded financial behaviour, both bad and good. In fact, it is the bad that had gotten us to the point. So, trying to fix these past mistakes will take some time. What is certain is that the scrubbing needs to start now if you are to feel the effects sooner rather than later. If you are planning to buy a house at some point, then you will need to improve your credit score for a better mortgage rate.
Find out where you stand
The very first thing you need to do is take the scope of the problem. Although there isn’t really a magic number, most lenders use the scoring system adapted by huge credit rating agencies like Experian. If we go by Experian’s rating system which starts at 0-999, the higher up your credit score, the better. If you have anything between 961-999 you are well on your way to great lending terms. Once you start dipping below 720 then you start having problems with acceptances and high lending rates.
To fix this problem, start by finding out what your rating is and look at what it is that is ruining that number. Look for inaccurate entries first, those are easy to fix. Then look for unverified information that can be challenged and challenge that with facts. Then look for what is true but reflects negatively on you. Do you have unpaid credit card bills, have you borrowed too much or stretched your income too thinly? Ask for a credit report, identify the problem areas and take appropriate steps to fix them.
Clear out your current debts
There are no two ways about it, you simply must clear off your current debts if that credit score is to start looking positive. At this point, we are talking about nuisance balances on your credit cards. This is actually a big issue for those people who have more than one credit card. What you can do here is have all that debt combined so that all but one credit card is clean. It’s a game of numbers, but it actually works. Additionally, paying off all those little things that eat into disposal income will leave you with more money to spare and pay off any additional mortgages.
Do not remove old debt from the report
Most people erroneously believe that leaving old debt on their reports reflects negatively on them. Quite on the contrary, the fact that you have cleared off old debt is a good thing. That car payment you cleared last year or your student loans that have been paid off are all excellent things to leave on that report. It gives lenders hope and confidence that you DO pay your debts. The longer your history of paying debt, the better you look to lenders.Tags: buy your first home, how to improve your credit score, ways to improve credit score