Your credit score is one of the most important numbers in your adult life. In order to be able to borrow money at a fair rate for things like auto loans and mortgages, you want to have the best possible credit score. If you have had marks against your score for various reasons in the past, you can take action to improve your score and look forward to a brighter financial future. The following four tips will show you how to fix your credit report and improve your borrowing possibilities.
Fix Your Damaged Credit Report with Four Great Tips
Get a Report and Correct Any Errors
While it might seem unlikely, there are actually errors made all the time on credit reports. To make sure yours in correct, obtain a free copy from any of a number of sources. Review all negative marks and see if there are any mistakes. Even errors like a misspelling or a wrong address can allow you to have the mark removed. If you find anything, contact one of the credit reporting bureaus and request that the error be taken off.
Maintain a Good Ratio
Part of your credit score is the percentage of credit that you have open and available to use. If you have a balance owed on your credit card, try to pay it down to a lower level to where there is a good amount of available credit on the card. By not carrying too high a balance, you can give yourself some financial flexibility as well as improving your score.
Use your Credit Actively
If you can use, and pay off, credit cards on a regular basis, you will slowly build up your credit score. You will be demonstrating your ability to use credit responsibly, which is something that lenders look for when assigning you with a risk evaluation. Be careful to always pay off your credit card balances before the statement closes, or you will carry a balance over and have to pay interest on that total.
Open a Diverse Group of Credit Lines
Your score can also be improved by holding a wide variety of credit types in your name. If you can have an auto loan, student loans, credit cards, etc., and have them all paid on time each month, it will greatly improve your score in time. Proving your ability to manage a variety of accounts and make payments reliably month after month is a big part of having a great credit score.