If you're having trouble with your credit, you're not the only one. Every day, a lot of people are turned down for funding, financing, and loans because they have bad or no credit. Most of these people keep making the same mistakes with their credit.
By avoiding these common mistakes and following these tips, you can raise your credit score and increase your chances of getting a loan with a lower interest rate.
- Look at the report of your credit. It's one of the most common mistakes, but you need to know if what's on your credit report is true or not. If you make mistakes, it could hurt your score.
- Tell your creditors if you move so you don't lose your bills and have to pay them late.
- Pay your bills on time every time. This is one of the most obvious ways to hurt your credit score, but many people don't listen and end up with a history of late payments. Even if your payment is just a few days late every month, it will still hurt your credit score. Also, if you don't pay on time, you may have to pay late fees and charges and your interest rate may go up.
4: Ignoring your credit problems will only make them worse and hurt your score even more. Contact and talk to your creditors before you miss your next payment, and work out a plan to pay on a slightly different schedule. This can stop bad news from getting to the credit bureaus.
5: If you can, try not to use expensive types of credit. It has a bad score and costs too much in interest and fees.
- Don't get too much credit, i.e., don't get too many credit cards. If you do this, it can hurt your credit score because lenders might think you won't be able to pay back all of your debt if you borrow or charge the full amount of your credit lines.
- Don't ask for more money than you can pay. This will only add to your debt and make your interest rates, fees, and penalties go up. Also, it puts you in a position where you might not be able to easily pay off your debts for years, or even for the rest of your life. If you must charge, make sure you can pay off the whole amount at the end of each billing cycle.
- Don't spend more than you can afford. If you go over your limits, you'll have to pay over-limit fees. This will hurt your credit score with creditors and show up on your credit report. It's never a good idea to go over the limits set by your credit agreement, because that will only make it harder for you to borrow money at the rates you want.
- Don't just pay the minimum amount due each month on your credit cards. It not only keeps your account balances high, causes your interest rates to go up, and makes it take longer to pay off, but it also hurts your credit score.
Even though this isn't a full list of credit mistakes, if you fix some or all of the ones above, you can improve your credit score and make it easier for more lenders to trust you in the future.
