What score is considered bad? Well, anything below 600. The more your score dips down, the greater effort you should put in to fix the issues. A quick fix is a must; otherwise endless will be the suffering when it comes to applying for loan. You will be driven from the pillar to post but the neat result will be zero because you will come back empty handed from every lending house. Even if some want to extend financial help, you have to pay through your nose for interest payment. Here are some steps regarding how to rebuild & fix your credit score.
Get two types of credit cards
It is important to open both lines of revolving credit cards. If your credit score is far below 600, you will less likely to get a store credit card. Those roaming in the 300 range must try to get two secured credit cards. Yes, you need to deposit a goodly sum but at the end of the day, you will realize that it is worth paying that much.
Pay off all dues on credit card
It is not a new suggestion; you must have read it before. Still, the online authors reiterate the same line because no effort to improve credit score will be fruitful if this point is neglected. Besides clearing the outstanding dues, it is also important to pay off the scheduled installments if you take loans in future, otherwise it will be a dirty picture and you will be in complete debt mess. How quickly you clean your dues accounts for 35% of your credit score improvement.
Maintain zero balance
A zero balance is ideal for building and maintenance of a good credit status. High balance does a damaging act to your credit rank and pulls it down by 30%. Pay off the high balances as fast as possible. And until the balance comes down to zero, stop purchasing unnecessary staffs.
Patience is important to build/rebuild your credit
Whether you are building it for the first time or rebuilding it from the verge of ruin, no good turn can be experienced overnight. At least six months’ waiting is a must to enjoy some improvement. And it may take one or two years to bring back your credit score to its former glory.
Be committed to your purpose
No fits and starts but an uncompromising dedication is needed for credit recovery. And once it gets back to the normal level (ideal status), the banks will approve your loan application. The banking authority will definitely ask about your credit history. Though it dipped down once upon a time, but now it is quite stable, so you won’t have any problem to convince the authority.
To turn around credit score, you need to be committed, hard working and patient; the desired result will definitely come your way……….