How to fix your bad credit rating

With good credit, you can usually get a car loan easily, be offered credit cards and be able to receive the lowest rates on mortgages. With a poor credit rating, you will usually have to pay more to borrow money and in some circumstances can even be denied a loan.

Steps

• First off, make sure all information on your report is accurate, if not make sure you contact the big three reporting agencies to report any mistakes.
• Another tip to increase your credit rating is to lower your debt. The more debt you have, ultimately the more risk you are to lenders. Look at your debt to income ratio. You shouldn’t have debt more than 20% to 30% of your yearly income (not including your mortgage or student loans). By lowering your debt to income ratio, you should be able to easily increase your score.
• Another tip is to decrease the amount of credit cards or loans you have outstanding. While one to three credit cards is the norm, anything more and you might raise red flags. Even if you have no balance on your cards, the ability to instantly lend tens of thousands of dollars from a variety of credit cards you hold scares lenders.

published 2 years ago

schmeidi

641 points