Did you know that having a low credit score could effect your chances of getting a job? It is becoming more and more common for employers to pull the credit history of any potential employee as part of the application process. It is never too late to start rebuilding your credit. By following these steps you should begin to see an improvement in your credit score within a few months.
Where Are You?
The first thing you need to do is sit down and take stock of your current financial position. Write down every debt you owe. You may want to pull your own credit history to see exactly what items are reflected. There may be bills that you have forgotten about or even errors. You can get your credit report for free by visiting AnnualCreditReport.com
Dispute Any Errors
It is not uncommon to find errors on a credit report. It happens more often than you would think. If any accounts show up on your credit report that are genuinely not yours, you should dispute it with the credit bureau. The credit bureau will investigate and either remove it or validate the debt. If the credit bureau states that it is a valid debt, and you still feel that it is an error, you can appeal the decision, and the credit bureau will make another investigation.
Contact Your Creditors
Many creditors are willing to work with you on payments. Although some may not be willing to refinance or lower payments, it is worth the time to call and find out. Some companies may offer you a reduced pay off amount. Be sure to request that once an agreement has been made, that the company begin to report it on your credit.
Get a Loan
You may not think that getting a new loan would help your credit, but it will. You must start adding accounts to your credit that show up as paid on time. Depending on how bad your credit is, you may need to go to a small local loan company. There are many small loan companies that cater to customers with bad credit. The interest rates are usually a lot higher than anywhere else, but then again they are taking a risk by loaning you the money. Just think of it as “buying” good credit.
Don’t Over Apply
While you do need several open credit lines, of different types, it is unwise to apply for credit too much. Any time you apply for credit, the company pulls your credit history. Each time this happens, you are hurting your score. It becomes a delicate balance. You need to apply for credit, but if you are turned down three times, you should stop applying for awhile.
There are many factors that affect your credit score, and following these steps will address a few of them. You can also contact debt consolidation companies who will work with your creditors to get you down to one payment. If you haven’t had any luck with a creditor working with you on payment, these companies may be able to convince them to make an arrangement with them.