If you’re looking to improve a bad credit score, you’ve already taken the first step to better interest rates, fewer calls from collection agencies, better loans, and overall good credit. The hardest step is sitting down for the research to get started.
From there, all it takes is landing on a blog like this one to get started. As such, we’re here to tell you the top five ways you can get started in building your credit score at home. Keep in mind, while a credit score can fall fast, most ways of building it take time.
Though there are options to speed up the process, there is no quick fix. With that in mind, let’s begin!
1) Find & Dispute Errors
The best way to build your credit score is to find errors in your credit report. Like humans, credit agencies aren’t perfect, so mistakes happen all the time. However, it’s your job to find them and make sure they’re fixed. The good news is, this is something you can do at home. Simply get your full credit score from a credit reporting company (they have to give you one for free once a year) and take a look at it.
Going line by line, make sure that everything marked is true and factual about your credit usage. If you see a late payment that you know you paid on time, then you can dispute the error to get it removed. Make sure you have backup evidence to prove your case though! If you can’t prove it was an error, then they might not remove it.
2) Pay Bills on Time
The best way to grow your credit is to pay your bills on time. This includes your rent, mortgage, car loan, personal loan, and even electricity and water bills. Each loan and bill you have can help or hurt your credit.
If you always pay your bills on time, then your credit will slowly grow. If you don’t pay your bills on time once or twice, then your credit can take a dive for the worse. Though this is a slower option, it’s tried and true. In addition, it’s something that you can do without thinking if you have the option to use auto-pay.
3) Get & Use a Credit Card
If you’re starting from ground zero, then your first step will be getting a small credit card. Use this to pay for things like groceries and gas. At the end of the month, pay the whole credit card off the day after you get the bill.
With this method, you can teach yourself healthy credit habits and show the credit lenders that you can be trusted to have a credit card and pay it all the way off on time and regularly. Remember, treat your credit card as an extension of your band account, not an addition.
4) Employ Smart Loan Usage
Loans are a part of life and should be used when needed. However, just like anything in life, they can be used too much or at the wrong times. If you’ve taken out loan after loan and failed to repay them, it’s time to be smart with your loans.
Loans can be used to build or add-on to a home. Loans can also be used to help with emergency bills, getting a car, or even starting a business. The important thing you keep in mind is if you really need the loan and how you are going to repay it.
If you want to get a loan to start a business, then make sure you have a solid business plan and a way to pay back the loan if things don’t work out. If you want to get a car, make sure you can afford the loan repayment. One of the worst situations your credit can hit is having too many loans you can’t repay.
5) Use a Credit Solutions Company
At the end of the day, after you’ve disputed your errors and started using your credit smartly, you have two options. The first is to wait – which could take up to five years! On the other hand, you could see if a credit solutions company could help you build your credit.
Make sure you go with a company that only makes you pay when things are taken off of your credit (like LEAF Credit Solutions.) Companies that make you pay by the month could accomplish nothing for you and walk away with cash.
Companies like LEAF credit solutions help you to get things off your credit that you might not be able to yourself. For example, marks that violate laws or aren’t completely to credit code. Without knowledge of how the credit system works, it can be hard to do this on your own – and it’s better than waiting five years for the marks to go away on their own!