There’s no quick way to fix your credit. While damaging your credit seems so easy, restoring it takes financial discipline and attention to detail. Here are a few initial steps to achieving a credit score that you can be proud of.
Check your credit report
Your credit report is like the health of a young adult. Special circumstances aside, you can pay bills late or eat fatty foods and it may not affect your daily life. However, when it comes time to purchase a home or do something athletic, you realize the impact of your neglectful behavior. Nobody likes to go to the doctor and nobody likes to check their credit score.
Stop it! You need to see your credit report and credit score to give you a baseline for how bad your credit really is and what debt needs to be paid off first. Your credit report may also contain errors that are negatively affecting your credit score.
Reduce your debt
The best way to do this is to reduce your revolving debt (credit cards.) This has a greater impact on your credit score than paying off installment loans (mortgage, auto, student, etc.). Expert say pay off the credit cards with the highest interest rates first. Create a payment plan, if necessary.
Pay bills on time
This is the most critical action you can take aside from checking your credit report. Delinquencies weigh heavily and collections accounts stay on your credit report for seven years, even after they are paid off. Also, if you establish a pattern of paying bills on time, it will reflect more positively than past late payments because a good payment history is being established.
Open a new account and pay consistently
While it’s not good to open a credit card needlessly, using credit cards and consistently paying the balance establishes a positive payment history. Credit experts also advise using your oldest cards occasionally.