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Fixing Your Credit Yourself
Fixing your credit yourself doesn’t have to be as hard as it’s made out to be. If you’ve been turned down a few times because of your low score it’s easy to start feeling like you’re doomed forever, but the truth is that there are many small changes you can make that will have a huge impact.
Before you can do anything you need to get a copy of your credit report, which you can do free (once a year) online. Your score is calculated based on information in this report, so you’ll need this to know what you need to work on.
Probably the biggest thing you can do to help yourself, that takes a bit more effort and time for most, is to pay down any balances you have open. This will go a long way towards fixing your credit. Of course, many don’t have the option to do this immediately, but over time this is the best thing you can do to help yourself.
Once you have your report the first thing you’re going to want to do, because it is the easiest and fastest, is check over your report for mistakes. We’re not really interested in things like misspellings of your name, we’re looking for accounts you have paid off in full marked open, or overdue. An important factor in calculating your score is the ratio of the credit you’ve used, versus that which is available to you. Look at where your card limits are listed and check to see if they’re correct, if they are marked as lower you’ll want to have this fixed. Any mistakes you find you can call and ask companies to change them, if they’re unhelpful keep calling until it gets fixed.
As a general rule, on a month to month basis, I recommend using less than thirty percent of your limit on your cards, and paying them off in full each month. This will give you a healthy record of using your finances sparingly and carefully.
While there, of course, more things you can to help fix your credit yourself, these steps will give you a good running start.
What is Considered a Good Credit Score?
The credit scoring system that is available within the United States can be quite complex. In order to break it down on a basic level for you, the scoring system is done by three different agencies, each of which will have its own unique number based on your credit history. Although they all tend to be with in the same general area, at times they may differ by quite a few points. If you are wondering what is considered a good credit score, you need to understand that many lending institutions will choose one of the credit scores in order to decide your overall number. More than likely, it will be the score that is in the middle.
What is considered a good credit score is something in the mid 700s. Although this number will vary from lending institution to lending institution, this is an excellent number for you to shoot for whenever you are trying to get your credit score to the point where you can easily apply for a loan. What is considered a good credit score to most banks is 740 or higher. With this score you can usually walk in to the bank, sign some papers and get the loan that you desire.
It’s also important for you to understand that money is not as easy to come by as it was several years ago. Whenever the real estate bubble was at its height, money was extremely easy to come by and they were writing loans for people with almost any credit score, whatsoever. What is considered a good credit score now is certainly different than what was considered a good credit score at that time. Even during the time whenever all of these loans were being written, however, a good credit score that was well within the 700s was always smiled on and most banks never had any difficulty writing loans for those individuals.
If you have recently checked your credit score and found that it is a little bit low, you can always take some steps in order to raise it again. Making sure that you do not have too many small credit accounts attached to your name as well as ensuring that you are below 50% on all of those accounts and pay a little bit more than the minimum will help to boost your numbers considerably.