A person with a bad credit rating is considered as a risk by the lenders. Most lenders will not extend any credit or approve a loan to a person with a bad credit rating.
If you have a bad credit rating, you need to work to improve it. You can approach any company specialized in credit repair Orlando to discuss plans to improve your credit rating. To make things easy for you, we have discussed a few tips to fix a bad credit rating.
What Is a Bad Credit Rating?
The credit rating or credit score is a three-digit number based on your credit report. It is a valuable score for lenders who need to understand how you repay the money you borrow. A lower credit score in the range of 300 to 579 is considered a bad credit rating. A credit score above 670 is considered a good credit rating.
If your credit score is in the range of 300 to 579, you need to raise it to 670 and beyond. Here are some credit repair tips to follow.
Check Your Credit Report
There are three credit bureaus – us – Experian, Transunion, and Equifax. You can ask any credit bureau for your credit report. The credit report includes the following things
· Types of accounts like mortgage, auto loan, student loan, credit card debt, personal loan.
· Payment history
· Inquiries – soft and hard
· Bankruptcy details if any
· Information about past-due accounts that have been referred to collection agencies
You need to check the report for any inaccuracies and dispute any you find. You can approach a company specialized in credit repair in Orlando to file any dispute with the credit bureaus regarding incorrect details in your credit report.
Pay Outstanding Balances
You need to make efforts to pay outstanding balances as early as possible. You can try taking a debt consolidation loan for this purpose. You need to pay high-interest outstanding balances first like credit card overdue. A debt consolidation loan generally has a lower interest rate than credit card balances.
By taking a loan to pay outstanding balances, you are saving money in the long run. Paying off outstanding balances would work to improve your credit rating.
Pay Bills on Time
After you have cleared outstanding balances, prepare a budget, and make it a habit to pay all bills on time that includes utility bills, loan repayments, and credit card bills. Don’t pay the minimum amount on a credit card bill, pay the full credit card dues every month.
If you don’t pay loan installments on time, the lender will report a late payment to the credit bureau that will further lower your credit rating.
Avoid Hard Inquiries
A hard inquiry refers to a lender check of your credit report when you apply for a loan. Most people make mistakes when approaching many lenders for a loan which results in multiple hard inquiries in your credit report. If you want to apply for a debt consolidation loan, compare different loan offers and select the one that suits your requirements.
Keep Old Credit Cards
You should not close your old credit cards. Closing them also deletes related payment history that affects your credit rating adversely. If you want to close any credit card account, close the newest one.
Add Yourself as an Authorized User to Another Person’s Credit Card
It is a common practice to request a family member to add you as an authorized user on their card to improve your credit score. However, you need to try this method with a person you can trust or a family member. When you add yourself as an authorized user on another person’s card, the card’s financial activity also gets reported in your credit report. The result is your credit rating improves.
Increase Your Credit Limits
A high credit utilization ratio affects your credit rating. You can bring down the credit utilization ratio by increasing your credit limit. For example, you can apply for a new credit card which will increase the credit limit. You can also credit Card Company to increase your credit limit for older credit cards.
Do you have any questions about credit repair in Orlando?