Your credit score is the life blood of not only how you’re viewed by lenders but also if you’re going to be afforded loans for things that you want and need: cars, schooling, house, etc.
So the question is quite simple: Is your credit score on life support?
To answer that question, you have to know what it is first, and foremost.
Knowing your score can give you a good idea of a starting point and ultimately where you want to go from there. Getting your score also allows you to make sure it’s accurate, as you wouldn’t be the first person to suffer from some sort of mistake that is not in your favor and thusly is dragging down that three digit number.
If all the information and debt is accurate, then it’s time to go to work on building that score back up again, and this time for good.
But if you’re fretting because you believe that your score and raising it is going to take considerable amount of time, you’re right.
You can start breathing life into your score by only doing a few simple things.
In addition to checking your score for accuracy, you also want to begin a better management system for your debt, specifically paying down current debt. To do that correctly in order to better manage your credit score, check your balance to credit limit ratio and start there.
That means if you have a current balance that is extremely close to your actual limit, you’ll want to focus on that right away, because if that is the case, creditors assume that you’re essentially “maxing out” all your available credit.
The flip side of that process is the thought that you want to close your unused credit cards, but that only hurts your chances of improving your score. Think about it, if you have credit cards with high balances that are right up your limit, then closing accounts that have zero balances on them is only going to make your debt utilization look worse.
Finally, if this pertains to you and how you pay bills, you want to immediately do one thing: stop paying your credit cards late. Every time you go beyond 30 days of unpaid balances, you will be sent to collections. Even late payments on credit cards are noted and will negatively affect your account and standing with your current lenders.
The best course of action is to pay at least the minimum payment just to avoid missing, since something is better than nothing pertains to this situation.
Your score might not be where you want it, but that doesn’t mean you can’t adjust slightly how you’re currently managing your debt to start climbing back to financial respectability.