Tips and Tutorials

How to Fix Bad Credit on Your Own In just 10 Steps

Written by BidyutJi

Bad Credit is a bane in the financial world. Living with a damaged credit has been tough since the early times. Once you discover that your credit score has gone down, it is necessary to fix bad credit. The truth is that building credit on your own is not that difficult. Credit scores not only govern insurance rates and loan approvals but also are a favor while getting a job.

What causes a bad credit? There are some financial misfortunes that drive your credit score down. It takes years of positive credit behavior to build a credit. Studies have proven that recession and financial crisis has led to the decline in the credit score of a majority of the Americans.

Credit repair is not an overnight process. However, you can fix credit on your own in just 10 steps. Credit repair agencies are just a waste of money. Despite spending money on credit repair companies you can utilize the available funds for building your credit score.

How to Repair Credit on your own

10 Steps to Repair Bad Credit

Read the tutorial below and get started for credit repair.

1- Repair your Credit Report

This is the primary step towards fixing your credit. Before beginning any credit repair activity it is necessary that you demand your credit reports from the credit agency. There are online credit report providers such as the Equifax, Transunion and Annual Credit Report.  Here you can find your credit report for free.

Repair Credit on your own Credit Report
Once you have your report, it is time to closely examine it. Check for errors or any unrecognized activity. It may be that your account has been a victim of identity fraud. Once you find an error on your credit report you should immediately write a Letter of Credit Report Dispute.

Take serious action the moment you find an error in your credit records. This is the biggest factors that can make up your credit score.

2- Ensure that your loan payments are paid before the due date

Late payments can be the culprit behind a bad credit. It is recommended that you make credit card bill payment and other debt payment before the due date. This would not only save you from paying high late payment charges but also enhance your credit.

Payment history is considered to be a serious factor in determining a credit score. If you fail to make a payment on time get in touch with your creditor. Request in writing to remove the late payment record from his books of credit.

3- Make a Payment Plan

Usually, individuals forget their loan repayment dates. Therefore, it is always beneficial that you enroll for an auto pay. This enables the automatic deduction of your loan installments from your savings or checking account.

The president of Consumer Federation of America says that “people are unaware of the fact that making payments on time can have a positive effect on their credit.

For more assistance, contact your creditors and sit down to make a payment plan. This method works if you are too busy to personally deposit loan installments. This would save your credit score from being damaged due to late payments.

4- Get a Secured Credit Card

Secured credit cards are a great help when it comes to fixing credit. It goes without a question that credit card approvals are too difficult when your have a low credit score. In difficult credit times, you can easily get a secured credit card. To get best deals on a secured card you can visit Nerd wallet and Wallet Hub. These websites offer you the list of best-secured credit cards of 2018.

How does a secured credit card work towards credit repair? This is one of the common questions that I come across almost every day. Secure credit cards report your credit information to the credit bureaus and thus it is easy transferring good credit information to the credit agencies.

Secured Credit Card

However, you need to keep a security deposit in order to obtain the card. You can compare the rates and a minimum deposit of the credit card at the websites mentioned above.

5-  Apply for an Unsecured Credit Card

Once you make the payments on time it is more likely that you will get the approval for an unsecured credit card. There are many in-store credit cards that offer easy approvals. Repairing your credit with a bank credit card yields better results. Therefore, it would be much better if you upgrade to an unsecured card.

6- Use your Old Credit Accounts

When you are fixing your credit yourself, even the smallest factors should be taken into consideration. Studies show that old credit card or loan accounts are more useful for rebuilding credit score. The length of credit history is longer in old accounts. So, do not close credit accounts that you have since years.

It is an old saying ‘keep your credit relationships you have’. Use only some amount out of your old credit card accounts. Ensure that you make the payment in full before the due date.

7- Take New Credit

Since you need to repair your credit score fast there are fewer options left. If you use a credit account with special care and responsibility it can boost your credit repair efforts. It is always a good idea to take a loan and repay it before time. This can reflect on your payment history and thus drives your credit score up.

Take new credit

However, taking new loans or credit cards can be full of risk. You need to tackle your credit account with perseverance.

8- Enroll for an Auto Pay

Credit Card and other loan repayments can be automated. This reduces the risk of missing out the payment on the due date. Whether it is your credit card account, utility bill or a mortgage account- late payments can hinder your credit score.

9- Take a Loan to repay the other one

It has been observed that people take loans from party A to repay the sum borrowed by party B. When you are in a credit repair stage, it is advised that you spread your balances. Small borrowings can improve your FICO score.

10-  Track and Monitor your Credit Score

It takes a long time to build credit. On the other hand, your credit can be damaged due to a single faulty activity. Therefore, you should keep a regular check on your credit score and reports.

Credit Score

These credit repair tricks can be performed easily. You do not need to be a credit or finance expert to follow the instructions above. Even if you have minimal knowledge of the subject, credit repair is possible.

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About the author

BidyutJi

Marketing professional with over 17+ years of progressive experience in digital marketing, product management, and user experience design.
Entrepreneur, Mentor for 1k+ Startups, Speaker. Passionate about innovation and entrepreneurship. Helped 1200+ small business to large corporations to grow through digital marketing and conversion optimization.

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