A good credit score is something that millions of people struggle with. The slightest infraction on your credit report can stop you from obtaining a car loan, paying a lower deposit for cell phone service and can prevent you from gaining mortgage approval. Forget getting a loan, it’s nearly impossible with bad credit. The good news is that you can help your credit score little by little to help improve your bad credit. It doesn’t take much and won’t hurt your finances either.
Pay Off Small Balances on Credit Reports
Obtain a copy of your credit report. Look through it and find the smallest listings and make arrangements to pay them off. Start small and work on the bigger items last. As long as you have payment arrangements in place and are making those payments, it will help your credit score dramatically.
The reason that you start with the small bills is that they are easier to get off of your credit report and don’t affect your financial budget much at all.
Pay Cell Phone and Car Payments a Week Early
Always try to make payments with creditors that report to credit bureaus early. This includes your cell phone, car payment, credit cards and mortgage. Paying early does help your credit score. Paying within your grace period is okay but is still not considered to be a completely on time payment.
When possible, pay more than the minimum amount due too. This helps to bring down the principal more and reduces the amount of interest paid at the same time. You’ll be able to pay off balances on credit accounts much faster.
Difficulty Getting Loans
Should you need to apply for a loan, making early payments and doing your best to get out of debt and back on track financially will help you some with a lender. Keep in mind that it is quite difficult to obtain a loan with bad credit. Every inquiry into your credit is a mark against you and lowers your credit score so try very hard to not apply for credit accounts that you know you won’t be approved for.
When you have bad credit, you’re likely to have to pay higher deposits and interest rates if and when you are approved for a loan. The most likely option for a loan is with a quick cash payday loan or auto title loan.
Your credit score can even prevent you from getting a good job. Good credit shows responsibility in all aspects of life. Do your best to maintain a good standing with your creditors. If you have a problem or financial setback, stay in contact with the creditor to get more time to make your payment and keep that commitment.