All potential lenders, landlords and employers seem to require a credit report before going any further with your loan, apartment application, or job interview. This report shows them exactly what your credit score is, and will alert them to how good or bad your money managing skills are. It also tells these people you really want to impress if you are reliable or not with repaying any debts.
For better or worse, your credit score is the one thing that will follow you all of your adult life. It will make a difference as to whether or not you get the car loan you really want. It will be the thing that makes it possible to be living in a cool apartment, or sends you back to your parents’ basement. A high credit score will put you in that sporty car you crave, or in that apartment where you can invite your friends with pride. Banks will be beating down your door to loan you money.
There is, however, the other side of the story. If you have a below average or poor credit rating, you will be counting change and hitting up your friends or relatives for money to pay large deposits and down payments. Otherwise, you will have no place to live, and no car to drive. However, it’s not all hopeless. There are several ways to pull your credit rating up to an acceptable rating.
All of your financial information will affect your credit score, be it positive or negative. Some of the information will have more an affect than others. When you are trying to make your credit score better, remember to start with the negative factors.
The first thing you need to do is start making any payments you owe on time. All payments are reported to the credit agencies regularly. Your credit score can improve within as little as 3 months just bypaying your bills on time.
Getting a copy of your credit report and reviewing it carefully for accuracy is also very important. Sometimes you will find that a creditor has reported you for late payments when you have been making your payments on time. This means you will need to take the time to write a letter to the credit agency to dispute this report, requesting that a correction is made on your credit. Having proof of this will help make this correction take place quickly. If you only have your word for this, it will take much longer.
Open a savings account and keep at least $500 in it. This will help to improve your credit rating. That balance will give you collateral for a personal loan. A bank loan can raise your credit rating faster than anything else.
If your credit rating is particularly dismal, you need to understand that there is not a quick fix. It took you years to reach this point, and it won’t be repaired overnight. But don’t let this discourage you. Instead, look for the light at the end of the tunnel, which should start appearing within 3 months of your improvement actions.