There are different reasons you can get a less than desirable credit rating. A nasty and costly divorce, bankruptcy, bad decisions on your finances — whatever the reason, a bad credit score will give you all sorts of problems.
When you have a FICO score of 619 or lower, there are consequences, particularly in getting loans. You may get a loan but you won’t qualify for the best interest rates. This is especially true when you are applying for a mortgage. In some cases, an employer will refuse to hire you because of your credit rating.
Almost everyone could use a better credit, but if you have an especially bad credit it’s important that you do everything possible to help your credit improve. It may take a while, but at least you’re doing something about it. Here are some suggestions on how to do that.
Pay your bills on time
Payment history is important, and when you miss payments — even the ones that are non-credit — the credit bureau might receive a report about it. So moving forward, strive to be on time with your payments.
Talk to creditors
Creditors may allow you a different setup in terms of payment, especially if you are having a difficult time getting current. Ask them to give you a payment scheme that you can manage. As creditors are only happy you’re still trying to pay, they might give in.
Get a loan you can handle
A loan that’s small and easy enough for you to pay can help you improve your score. Poor credit used car loans are an example of this kind of loan. Make sure, though, that when you get approved for the loan, you never miss a payment as this will factor against you. As long as you’re current and finish the loan, you can use this to help rebuild your credit.
Don’t cancel your credit cards
A long credit history is good for your score, so if it’s at all possible, avoid closing your credit cards. However, if you need to call the card companies to arrange an adjusted payment plan, you may have no choice but to cancel your cards. What you can do is try to keep at least your oldest card and do your best to pay off the balance.
There are other ways to help rebuild your credit. Do whatever you can to make this happen, and you will see your credit recovering over time.