Did you know that the average American is $90,460 in debt today?
A poor credit score can stop you from securing loans, mortgages, or renting properties. It can be very frustrating trying to restore credit to the point where you are approved for lending.
But, it doesn’t have to be. We’ve put together this informative guide to credit recovery so that you can boost your credit score every day.
Read on for everything you need to know for building a better credit score.
1. Always Pay On Time
Your payment history is the most important element for determining your credit score. You can’t afford to make a late payment while you’re trying to improve your credit score.
Late payments can remain on your credit report for up to 7.5 years, making them more difficult to overcome than other credit mistakes.
Pay your invoices and any current lines of credit on time. If you can only afford to pay the minimum, that’s better than defaulting altogether. If you realize you won’t be able to pay the minimum, contact your lender to ask whether alternate arrangements can be made.
2. Don’t Max Out on Credit Limits
The proportion of credit you use has a significant impact on your credit score. It is the second most significant factor after missed payments.
Most experts advise against using more than 30% of the credit limit on your accounts. The less credit you use, the better your credit score will be. Examine your credit usage on each credit card and work to reduce the highest first.
Your credit score will improve when your credit card provider reports a decreased balance to the credit agencies. Once you’ve reduced your amounts, your credit score will return to a higher rate.
3. Become an Authorized User
You could ask that someone make you an authorized user on their credit card. Your credit score improves just by being listed on the account. You do not need to make any payments or even use the account.
Some credit providers allow the primary cardholder to set transaction limitations for authorized users. This can help the account holder feel more at ease with adding you. You could even request that someone add you without providing you with a card or card number.
If you’re struggling with debt and need professional help, Credit Salvage can help you assess your current financial situation and work towards building better credit today.
How to Restore Credit Now
So, that’s the rundown of the top 3 ways to restore credit and access loans in the future.
Credit mishaps can happen to anyone. It’s how you move forward with building your credit score that matters. Hopefully, our guide sets you in the right direction.
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