Repairing Your Credit Score in 4 Steps

momeyIn the thoughtless world of plastic transactions, a whole lot of people find themselves in more debt than anticipated. Around 30 percent of Americans have bad credit merchant accounts, or a score lower than 601, according to data from VantageScore and TransUnion.

If you’re among these 68 million people, you might be wondering what you can do to reverse the trend. Aside from checking your credit report for errors (which you should definitely do), the recipe is quite simple. Repair your credit score in four straightforward steps:

Pay Your Bills on Time

As smooth and painless as it feels to pay for things with a credit card, real money is still being exchanged. The amount that those seemingly effortless swipes (or, I suppose inserts) add up to carries a due date. If it’s not met, a credit score suffers. How badly? Payment history is the most significant component of the FICO scoring system, comprising 35 percent of a credit score. Missed payments obviously leave individuals with impacted scores, but late payments can also chip away at a credit score.

Thankfully, it’s not all that difficult to pay credit card bills on time, especially if a balance is from essential purchases already budgeted for. Regardless, it’s a good idea to set up automated payment reminders or even automated bill pay so you can guarantee you’ll never miss another credit card bill.

Rest assured that the shaky payments of your past shouldn’t impact your future too much, at least, if you can put together a string of positive behavior. Creditors give recent positive patterns more weight than past negative marks. The tricky part is getting approved for another credit card with a score in the weeds. NerdWallet breaks down three credit cards that are easier to get approved for.

Pay More Than the Minimum

As tempting as it is to tread water paying the minimum balance, deep down, you’re hurting yourself and your credit score. Paying the minimum balance leads to maximum interest charges and creates revolving debt, which doesn’t improve your credit utilization. Second to payment history, credit utilization factors into 30 percent of FICO’s credit score. So it’s fair to say that high balances and minimum payments are an excellent combination to keep low credit scores consistent. Low balances and minimum payments? Not so dangerous. But they won’t improve a (bad) credit score, or make much sense.

Keep Track of Accounts and Credit Balances

Given the weight of credit usage in a FICO score, poor credit scores will improve as long as progress is made on debt. If you’re barely keeping pace with several high balances and trying to find a solution while increasing your score in the process, then it’s worth looking into debt consolidation options. Entrepreneur and financial thought leader, Andrew Housser, is the CEO of Freedom Financial Network, which works with debtors to organize their balances and create an action plan to get out of debt.

If your situation isn’t as dire, but in need of repair, the important thing to focus on is practicing healthy account behavior. This includes making payments on time and not using too much of your overall credit limit, but also involves not opening too many accounts at a time or attempting to close unused cards to manipulate your score. After all, these accounts—closed or not—will stay on credit reports for several more years. Using a site like creditsesame can help you find out the information you need.

This doesn’t mean you should freeze all activity, however. Opening a new account and maintaining responsible behavior can accelerate credit-building.

Make Payments Before Taking on New Debts

As mentioned above, revolving debt is a credit-score killer. High utilization rates make creditors weary. If you add to your debt without paying down existing balances, you’ll suffer the consequences in further credit score damage and all sorts of extra money in interest. Never pay for anything with a credit card if you already carry debt. By doing so, your overall utilization rate will increase when you want it to decrease.

Don’t trust yourself? Cut up your cards. A five-to-seven business day card-issuing wait period should quell any momentary urges to spend. It’s also worth stating that while debt consolidation options like balance transfers and personal loans can be useful in the right situation, it can also be the epitome of moving money around without attacking any real amount of principal debt.

Make these four behaviors a habit, and soon enough you’ll have a high-flying credit score that’ll vouch for you in any scenario.

Related Posts:

Total
0
Shares
Share 0
Tweet 0
Pin it 0
Tags

The Healthy Voyager, aka Carolyn Scott-Hamilton, is the creator and host of The Healthy Voyager web series, site, and overall brand. An award winning healthy, special diet and green living and travel expert, holistic nutritionist, plant based vegan chef, best-selling cookbook author, media spokesperson, sought after speaker, consultant and television personality, Carolyn Scott-Hamilton is a respected figure in the world of healthy lifestyle and travel as well as special diet cooking and nutrition. The Healthy Voyager aims to help people live well, one veggie at a time!

76 comments

  37. Your speed and agility may suffer, even though create the monitor is dazzling enough.Black
    Adam 2022 set in darker caverns and deserted warehouses
    could have fantastic ambiance. It would make your colors quicker to discern and
    you’ll have the capacity to place your opponents won’t see you before they spot you.

  45. I think this is among the most vital information for me. And i am glad reading your article. But want to remark on some general things, The site style is wonderful, the articles is really nice : D. Good job, cheers

  55. Aw, this was an exceptionally nice post. Spending some time and actual effort to generate a great
    article… but what can I say… I procrastinate a whole
    lot and never seem to get nearly anything done.

  58. It’s actually a great and useful piece of information. I’m satisfied that you simply
    shared this helpful info with us. Please stay us up to
    date like this. Thank you for sharing.

  60. A fascinating discussion is definitely worth comment.
    I do think that you need to write more about this issue,
    it may not be a taboo subject but typically people don’t discuss these
    subjects. To the next! Kind regards!!

  62. Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point.
    You obviously know what youre talking about, why waste your intelligence on just posting videos to your
    site when you could be giving us something informative to read?

  65. Howdy! I know this is sort of off-topic but I needed to
    ask. Does operating a well-established blog such as yours require a large amount of work?
    I am brand new to operating a blog but I do write in my diary daily.
    I’d like to start a blog so I can easily share my personal
    experience and feelings online. Please let me know
    if you have any recommendations or tips for new aspiring bloggers.
    Appreciate it! https://postheaven.net/n8utkvh500/but-the-most-significant-news-in-football-has-not-addressed-any-player-or-staff

  66. Pretty section of content. I just stumbled upon your website and in accession capital to
    assert that I acquire actually enjoyed account your blog posts.
    Any way I will be subscribing to your feeds and even I achievement
    you access consistently quickly.

  69. I’m really loving the theme/design of your website.
    Do you ever run into any web browser compatibility
    issues? A few of my blog visitors have complained about
    my site not working correctly in Explorer but looks
    great in Safari. Do you have any advice to help fix this issue?

  70. I’m not positive where you are getting your info, but great topic.
    I needs to spend a while finding out much more or
    understanding more. Thank you for excellent information I
    was searching for this info for my mission.

  71. สล็อตโปร100 ถอนไม่อั้น สามารถเข้าเล่นได้ตลอด 24 ชั่วโมง ฝาก ถอนเงินรวดเร็วด้วยระบบออโต้ที่ทันสมัยมากที่สุด กับเว็บสล็อตออนไลน์ที่มาแรงที่สุดในตอนนี้ อย่าง PG-SLOT.GAME

  72. Howdy would you mind stating which blog platform you’re using?
    I’m planning to start my own blog soon but I’m having a
    hard time making a decision between BlogEngine/Wordpress/B2evolution and Drupal.

    The reason I ask is because your design and style seems
    different then most blogs and I’m looking for something completely unique.
    P.S My apologies for getting off-topic but I had to ask!

  73. Hi there, I discovered your blog by way of Google at the same
    time as looking for a related matter, your website got here up, it seems great.
    I’ve bookmarked it in my google bookmarks.
    Hi there, simply became alert to your weblog via Google, and found that it is truly informative.
    I am going to be careful for brussels. I will be grateful
    for those who proceed this in future. Lots of folks
    might be benefited out of your writing. Cheers!

  74. What you published made a ton of sense. But, what about this?
    suppose you composed a catchier post title?
    I am not saying your information isn’t good., but suppose you added a
    title to possibly grab people’s attention? I mean Repairing Your Credit Score
    in 4 Steps – The Healthy Voyager is kinda boring.

    You could glance at Yahoo’s home page and note how they
    create article headlines to grab people interested. You might try adding a video or a related pic or
    two to grab readers excited about everything’ve written. In my
    opinion, it would make your blog a little livelier.

  75. Hmm it looks like your site ate my first comment (it was extremely long) so I guess I’ll just sum it up what
    I wrote and say, I’m thoroughly enjoying your blog.
    I as well am an aspiring blog writer but I’m still new to the whole thing.
    Do you have any tips and hints for novice blog writers?

    I’d certainly appreciate it.

  76. Hi.

    All advice is very important and relevant, these are the main things that people often neglect and then they have loans, debts and a poor credit rating.
    Thank you for talking about this and I hope that there are people who have read this and made conclusions!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.