4 Ways You Could Fix Your Credit Report

Having a good credit score can make it much easier to get a loan, get an apartment, get a car, and do so much more. But while your credit score gives a brief snapshot of your overall credit health, it is your credit report that shows the whole picture. While it would be lovely if this picture were always a great one, that isn’t the case.

Plenty of people struggle with bad credit that can make it difficult and expensive to borrow money. But thankfully, you aren’t doomed to have bad credit forever. This article is going to go over a few helpful tips to assist you in fixing up your credit report.

Search for Errors and Dispute Them

In order to fix your credit report, you need to look at it. Take some time to request a copy of your credit report, and look it over in detail. In general, how you utilize credit (either properly or poorly) will be reflected on your credit report. It will give you the context and reasoning behind your credit score.

However, while many accounts or items that negatively impact credit are warranted, many reports will also feature mistakes. If you notice some mistakes, errors, or other problems on your report, be sure to dispute them. This isn’t always successful, but if it is, you will definitely see an improvement in your credit.

Reduce Your Credit Utilization Rate

Another way to fix your credit report and improve your credit as a whole is to reduce your credit utilization rate. This is essentially the amount of your available credit that you use every month. For best results, you often want to keep your utilization at or below 30%. If you spend too much of your credit each month, many lenders will think you are overspending and not managing your credit successfully.

If you want to reduce your rate, it is a good idea to limit your spending on credit. Another way to do this could be to increase your limit but only do this if you have enough self-control not to overspend. Of course, be sure you know how to calculate credit utilization rate so you can make sure you always know where you are each and every month.

Make Your Payments On Time

While there are many factors that influence your credit score and overall credit health, the biggest is making your payments on time. Doing this shows lenders that you can be trusted to pay your debts and makes yourself a more reputable borrower. If you have a long history of making payments consistently on time, most lenders will have no problem with you borrowing from them.

In addition to making payments on time, it’s a good idea to make them in full, as well. If you can’t remember to pay your bill every month, consider setting yourself reminders to keep you on top of it.

Limit New Credit Requests

Another tip to help improve your credit is to be careful when it comes to requesting new credit. Many times when you request new credit of some kind, a hard inquiry will take place. This can have a temporary negative impact on your credit score for anywhere from a month or two, up to a year or longer.

If you are always applying for new credit, banks and lenders will notice these temporary drops in your credit and could take it to mean that you are struggling and need a bunch of money quickly, and this won’t look very good. While requesting credit every now and then is fine, you need to be careful not to overdo it.

All of these are great ways to fix your credit report and ensure that your credit is in a good place. While they might not improve your credit score overnight, they can certainly have a major impact over time.