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Advice for Recovering Your Credit Score Before it’s Too Late
Advice for Recovering Your Credit Score Before it’s Too Late

 

Building your credit score is an important aspect of adulting. Credit scores are determining factors in most money decisions that are made on your behalf. Banks look at credit scores when you apply for loans to decide if they will approve you and how much interest they will charge. Companies such as electric companies, cell phones, and such look at credit scores to determine if you are eligible for their services and if you will be required to have down payment/deposit. If you have had a financial crisis that lowered your credit score there are things you can do. You can hire credit repair services to help you raise your score. This may cost but will take away some of the stress of figuring it out alone or you can get a copy of your credit report and follow these tips. 

 

Pay off Debt and Pay Bills On Time

 

One of the best ways to raise your credit score is to pay off your debt. The more debt you have the higher your debt to income is. Debt to income is when you compare the amount of money you have going out every month to the amount of money you bring in every month. If your outgoing money is high, then it looks like you could be a risk to a financial institution. The lower your debt the better your score. 

 

On this same note, you must pay bills on time to raise your credit score. Most companies report monthly payments to credit bureaus. If you have late payments, it reflexes your score, and it makes you look like you have an unpredictable payment history. If you make timely payments, banks will be more willing to lend you money when needed. 

 

Become an Authorized User for Family or Friends

 

If you are struggling to get credit in your name or if you need to build credit without raising your debt to income, then consider becoming an authorized user on another person's account or a co-signer on a loan. This is a good option for young people who have little credit to work with. If the account, you link to is paid on time and the user is financially responsible then you will be able to benefit from their good payments. Their positive payments will be reported to your credit score, too. 

 

Do Not Apply for New Credit to Get the Discount

 

Almost every store has a credit card that allows you a discount for just applying. Even if you get turned down, you will get a discount that day. Do not fall for these sales tactics. Many of these stores have such high-interest rates that they can take a bigger risk on the creditworthiness of the consumer. The idea is, if you have a store card then you are more likely to shop there instead of somewhere else. You may even spend money on purchases that you do not need because you can pay later or pay a few dollars every month. The more you apply for, the lower your credit score, and the better your chances are to get into high debt. Do not apply for the store card, it will cost you more than the instant discount you get in the long run. 

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