Imagine how beneficial it would be to add 200 points to your credit score.
Credit scores are one of the most important aspects of your financial well–being. The amount of debt you carry, how much money you make and other factors can all affect your score.
A bad credit score and a poor credit history are not only inconvenient, but they can also be crippling. For individuals who are trying to move forward with their lives, a bad credit score can greatly impede progress.
It’s not always realistic to expect to save cash for major purchases. Because of this, people need to have access to credit services sooner or later.
There is an
array of different credit repair services on the market today, but unfortunately, they can become costly. For individuals who are already struggling, shelling out more money to repair their scores may not be an applicable step to take.
However, it’s possible to gain credit score increases without paying for help. Read on to learn how to get a 200-point increase to your score without paid help!
Free and Low-Cost Credit Repair
If you’re in a situation where your scores are low and your reports show a very negative history, you’re not alone. People do not simply have credit issues due to being irresponsible.
Most of the time, low scores and negative reports are the result of falling on hard times. Also, having errors on the report that have gone unnoticed for far too long can be detrimental to scores. Any ordinary person can have problems with their credit and once it happens, it can be difficult to repair.
Paying large sums of money for credit repair services is not a realistic move for most people. Fortunately, there are credit repair services available that charge little to nothing.
These companies help individuals improve their scores and fix the issues on their reports. They also do not ask for an arm and a leg to do so.
Credit Sesame is a free service that checks an individual’s credit score and credit report to determine where improvements can be made. This way, consumers can increase their score and clean up their report.
What are the Factors that Affect Your Credit Score?
In order to add 200 points to one’s score, an individual must first understand how credit scoring works. This scoring
is done by using a variety of algorithms to analyze your average credit history.
The three main components of a credit score include: payment history, credit utilization ratio, and length of credit history.
The scoring process takes into account the information provided by lenders, which are all pulled from a database that tracks everything from credit card applications to utility bills.
When you apply for credit, your application goes through a verification process before it is accepted or denied. In addition to making sure that you have the ability to pay back the debt incurred, the credit bureau will also look at the payment history and credit utilization ratio on your report.
Payment history
is defined as the length of time that you have had a history of paying your bills on time. This component takes into account all payments that were made to creditors within the last 12 months.
If you have poor payment history, such as from failing to pay your bills in a timely manner, it can affect your score negatively. In contrast, if you pay your bills and debts on time, this will reflect in a positive payment history which adds to an improved score.
Credit utilization ratio is also very important to consider when calculating your score. This credit utilization rate refers to the percentage of debt that you owe compared to the total amount of available credit on your report.
In other words, how much of your available credit are you using? The lower your credit utilization rate is, the better.
Finally, the average credit history length takes into account how long you have been carrying debt and how much it has cost you to do so.
This is important because if someone hasn’t been responsible with their money for an extended period of time, it could be detrimental to their financial well-being in the future.
Review Your Credit Report
The first step to getting your score up is to make sure that you have a good credit report. The better your report, the more likely it is that you will be approved for credit and the easier it will be to pay off any debts.
One of the best ways to get a good report is by reviewing it yourself. You can do this by going online and checking out your own report and credit card balances for free. Doing so can help you understand what’s in there and how much debt you have.
If necessary, you can also dispute information and make credit inquiries on your report with the major credit bureaus. When it comes to disputing inaccurate information, there are several steps that must be taken before any action can be taken.
It’s important to note that if you want to dispute a charge on your report, your credit card company or credit card issuers need to acknowledge their mistake before they will remove it from your file. If they don’t take action, then the charge remains on your record indefinitely.
The Result of Credit Report Errors
When hardships occur, most of us do not have a significant amount of savings to fall back on. As soon as our scores fall to a certain point, it can interfere with our abilities to thrive.
It may become hard to obtain housing, vehicles, services, and a variety of other needs that we cannot manage without.
Because of this, it’s in a struggling individual’s best interest to see what they can do about their poor credit score and damaged credit report. A few simple steps could add 200 points to your score. By repairing your credit for little to nothing, you can finally take much-needed steps in your life.
Make Your Payments on Time
One of the best ways to improve your credit profile is by ensuring on-time payments. There are several benefits to making your monthly payments on time, including receiving an additional point for doing so.
If you can get a credit card that will allow you to earn rewards for paying on time, then it will also boost your score. If you have any late payments, then it’s important to contact your bank or creditor and let them know what happened.
They may be able to work with you if they understand why you were late and agree that it was an unfortunate situation. In some cases, they may even offer a grace period before late fees or interest charges kick in.
The best way to prevent being late with payments is by having an accurate view of your current financial situation. You should always pay attention to how much money you have in your checking account and how much credit card debt you have overall.
Knowing where your money is going will allow you to stay focused on keeping up with all of your bills as they come due throughout the month.
Diversify Your Credit
Another way to improve your score is by diversifying your credit card accounts. By adding a different couple of credit cards, you can give a boost to the number of factors that are taken into account when calculating your credit file.
The more information there is to work with, the better it will be for your financial well–being. In addition to opening new accounts, it’s also important to keep an eye on how much debt you have in each one.
This way, you can monitor what’s going on with each account and make sure that they are all being used appropriately.
If one of them isn’t working out as planned, then it’s best to close it and open a new one instead of carrying the same amount of debt on multiple accounts.
While having several different types of credit accounts will help boost your score, you should still only have two or three different types of credit accounts in order to avoid being labeled as a high risk borrower. Using too many cards at once could negatively affect your overall rating.
You could also have a good credit mix, which includes credit cards, installment loans, and lines of credit. Having a good credit mix shows that you have the capabilities to repay a wide variety of debts.
This lets our creditor know that you can handle all sorts of credit, which will in turn give a boost to your credit score range.
Final Thoughts
Although there are many different ways to improve your score, these tips will help you get a 200-point increase, paving you the road to an excellent credit score.
While it may not be realistic to expect an increase of this magnitude overnight, working on these things over time can really pay off.
And if all else fails, c
redit repair companies are always available to give you that extra boost. You should not be afraid to look into them for a more strategic financial plan. By doing so, you can finally take steps in your life that will allow you to succeed financially.
