If your credit score has taken a hit recently, you are not alone. Whether it is due to unforeseen circumstances like the car breaking down or you breaking your leg, or past issues with overspending and unnecessary purchases, the damage is much the same.
Creditors cannot tell where your poor credit score comes from – all they know is that your score is not as high as what they require. As a result, you could find yourself turned down for everything from car loans to the mortgage you need to buy your first home. Even if you do not need a loan right now, there are plenty of reasons to rebuild your damaged credit score, as you never know what financial challenges life will throw your way.
The good news is that there are relatively painless ways to improve your damaged credit score. Here are some simple strategies for rebuilding your credit and improving your financial life.
Pay Down Debt
The number one most effective way to boost your credit score and start rebuilding your credit is to pay down your existing debt. Timely debt repayment will aid your finances in many different ways, including reducing the amount of interest you have to pay and reducing the amount of time it will take to become debt-free.
There are many approaches to paying down debt, and you will need to choose the one that works best for you. Some people prefer to tackle their smallest balances first, while others focus on getting rid of the debts with the highest interest rates. No matter which option you choose, it is important to make paying off your debt a number one priority, one that will improve all aspects of your financial life.
Ask Your Landlord to Report Your Rent Payments
If you are renting your home or apartment, you may not be getting the credit you deserve, and that could make rebuilding your credit score more difficult. That is why it is important to talk to your landlord and make sure the rent payments you submit are indeed being reported to the appropriate credit agencies.
If your rent payments are not currently being reported, ask your landlord (nicely) if they can start doing so. Many landlords will be happy to report your on-time payments, especially if you have been a great tenant and they do not want to lose you (and your money).
Apply for and Pay Off a Small Personal Loan from Your Bank
If your credit score is less than optimal, you may find it difficult to get a loan, but seeking one from the bank where you have your accounts could be the solution. If you want to improve your credit score fast, applying for a small loan that will be easy to pay back over time is a solid strategy.
You will want to keep the amount of the loan low enough to make paying it off no big deal. Not only will this reduce the amount of interest you pay, but it will also help you build your credit profile as quickly as possible.
Repairing a damaged credit score is not an easy thing to do, but it can be done. If you need to repair your damaged credit score, you need a proactive strategy to make it happen, and that strategy should include the actions outlined above.