Discussion

When you have a better credit score, you are able to obtain loans with better terms and lower interest rate. You need a good credit score, it is necessary to borrow money for some personal reasons includes a car loan, credit card and a home loan etc. You can also purchase inventories and get the facility for the startup and growth of the business. Repairing a credit score is the major problem for the improvement of professional work. It only depends on the situation. However, if you do not have a good credit score, it is important to settle some of your debts to improve your credit score.

Here are four important steps that repair your credit score.

1.   Review your credit report

You should review your credit reports. There are so many credit bureaus that are required to review your credit report. They can provide you a copy without any charges once a year. These credit bureaus include Experian, Equifax and TransUnion.

There is another way to check and review your credit report, Credit Karma. It is the free services that provide an accurate credit report. Only you have to sign up and make an account on that site. And then you can easily see your credit score and view all the information that is contained on your report. Somehow your entries might be same but not always. A credit report is rarely identical across all credit bureaus.

2.   Pay your bills on time

Another way to repair your credit scores, to pay your bills on time. Moreover thirty-five percent of total credit scores are based on the payment history. The payment history shows your ability to make your payments on time. You will receive a payment notification on time once you paid your bills. In case, you receive late payment notification and potential insufficient funds (NFS) fees insufficient money in your account. Then your credit score will be affected adversely. So, it is important to pay your bills on time. You can also pay your bills in advance.

3.   Lower your credit utilization ratio

The credit utilization ratio is considering thirty percent of your credit score. Credit utilization ratio is one of the most visualize financial term. It shows the revolving debt and availability of revolving credit. You can also calculate your total revolving debt by dividing your total available revolving debt. Many lenders borrow less than thirty percent of credit that is less risky. However, a credit utilization ratio of fifty percent is the lower threshold of the credit score. Hence, to work with forty-nine percent maximum credit utilization ratios repairs the credit score. It is mainly closer to thirty percent where you can get better control over credit score.

4.   Close all your new credit cards

The last step to repair your credit score to close all your new credit cards. If you have a low credit utilization ratio than you can easily repair your credit score. If you have few credit cards then you can easily get a good credit score.

In this way, close your all new credit cards and keep your old cards. If you close your previous cards then you will definitely lose your payment history. You could also increase the limit on your credit cards. There are two important mechanisms in this step. The first one is to transfer all your account balance to the card with the longest payment history and the second is to avoid the temptation of shopping on credit.

 

 

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