When it comes to bad credit, you’re not stuck! Bad credit happens, and it can go up, just as it goes down. The trick is knowing how credit operates and then changing what you do so that your credit score gets affected in a positive way. Of course, they don’t exactly teach financial management and the ins and outs of credit in public schools, so most of us just found out along the way. You practically have to be a mortgage broker in North Vancouver to understand it all.
Some people know exactly how credit works and they have a great score because they make payments on time and do the things necessary to keep their credit score in good standing. Consult a counsellor or a mortgage broker in North Vancouver to find out more or just research to learn more about it.
5 Ways to Fix Your Bad Credit
1. Figure out what your current credit score is.
Figuring out what your credit score status is will help you to repair your credit because at least you know how bad it is and what you need to do. Not only will you figure out what your score is, but you will see all the reasons why you have bad credit and see what exactly it is that is affecting your credit score and dropping it down. You can even get free credit reports online through some services if you have been turned down for credit, are unemployed, receiving government assistance, or because of other circumstances, so look into it or ask a financial counsellor to receive more guidance on the subject.
2. Pay accounts that are about to get charged-off.
If you have a history of late payments, your score may be reflecting that. It’s over a third of your credit score, or how your credit score is calculated. In light of this, if you have bank accounts that are delinquent or in default in some way, you should work quickly to get them fixed up. You want your accounts to be paid up and current. You want to catch up on an account that has not yet been charged off, which happens when your payment is past 180 days due. Pay the total amount for the ones that are about to go into being charged-off and try to get in touch with them and see if you can have some of the late fees or past due balances waived, re-consolidating the bill. Sometimes, creditors will even accept a lower amount than the total you technically owed.
3. Don’t forget to pay charged-off accounts.
Although it’s best to catch accounts that are about to go past that 180-day stage, you still need to deal with any of your balances that have been charged-off. They don’t affect your score as much if they’re old (and have already had enough of an effect), but they are going to affect your ability to get a loan or even a new credit card.
4. Settle any collection accounts or bills.
All of the bills you never paid are out there, dragging down your score and affecting your ability to get any sort of loan or approval for anything that involves credit, and that can involve a living space. Collection agencies get sent these accounts when they have been charged-off or taken several months to be paid off.
5. Pay your bills on time.
One good thing you can do is to pay your bills on time. That will help avoid dragging down your current score and will establish a history of paying on time, which is really important. Making an effort to pay your current cable bills, mortgage bills and car insurance on time will pay off.