There are a lot of factors that influence your credit score, and because of this, rebuilding credit may take some time. The most reliable way to rebuild credit is to make consistent payments over a long period on accounts you already have with your lenders.
However, you can dispute some credit report items as another approach. Finding out what impacts your credit score and how to use this to your advantage will be a great way to help your credit elevate into the excellent category.
To rebuild your credit score, you can talk to a knowledgeable team who can teach you which actions to take. Our team will help you improve upon your negative credit history and show you how to make significant changes. Contact My Credit Repair Clinic for more information.
Rebuilding Your Credit Score
When you have good credit, it is easier to get approved for auto loans and mortgages. You can receive better interest rates along with much nicer contract terms. This is why keeping a good credit score is important for large purchases.
What Influences Your Credit Score?
Several factors have the biggest effect on your credit score. This includes the following:
Mixed Accounts
Credit reports will reflect the different types of accounts you have and what type of loans you borrowed. For example, you may have a mortgage, a car lease, a payment plan on electronic goods, and several credit cards. When you have many different types of loans across different industries and are current on them all, this is a good thing.
Age
The older your credit accounts are, the better. It shows dependability over a long time. Older accounts are seen in a positive light in comparison to newer ones.
Payments
If your payments have been consistently on time, this improves your credit score as each month passes. Every time you have a late payment, it may linger on your credit report for seven years and drop the number of points you have.
Debt Total
The total amount of debt you have can be seen negatively or positively. If you have too little debt, then lenders may be unsure of your ability to manage a loan. If you have too much debt, this can be seen as excessively borrowing too much money.
Credit Utilization Ratio
This is the ratio of borrowed money on credit cards as opposed to unused portions of credit. It is better to have your credit cards that aren’t maxed out and have a ratio where most of them are unused. A 30% credit utilization ratio will be seen more favorably than a 60% one, for example.
Public Records
When you file for bankruptcy or undergo a civil judgment, all of this will appear on your credit report for several years. A bankruptcy will stay on your report for up to 10 years while a civil judgment remains for 7.
Hard Inquiries
When you apply for new credit, organizations will perform a hard inquiry to learn about your financial situation. This can harm your credit score by a few points.
How Long Negative Information Stays On Your Credit Score
Negative events are listed as derogatory marks on your credit history. These items are reflective of any missed payments or any of the other items previously listed above. Typically, the derogatory mark will stay on your credit history for seven years. This is regardless of the category or severity of the reported item.
You will notice the day you became delinquent on a payment is the time that begins the seven years. The only way to improve a credit score is to budget better and stay consistent on all of your payments. It is better to stick with old accounts as opposed to opening up new ones.
The only item that will stay longer than seven years is bankruptcy, which can remain on your report for up to 10 years. If the item is incorrect, you may consider disputing the item to get it removed from your account immediately. This process can be done by phone, mail, or through an online form.
Getting Help To Get Your Credit Fixed Faster
You can open a secured account to help rebuild your credit history. This helps with getting approval for credit cards or loans. Secured accounts allow you to deposit cash into an account as collateral.
Also, credit counseling can help you manage your debt with valuable suggestions. Credits counselors may try to get you to start a debt management plan or begin debt consolidation.
Working with friends and family can also improve your credit score. Allowing an additional authorized user to join your account will help build credit. A family member or friend may help you obtain a loan as a cosigner. This is one of the options for you if you cannot apply for a loan due to poor credit. There are also joint accounts you can create with a loved one who has better credit.
To rebuild your credit, you can try to reduce your credit utilization ratio. This can be done by paying off credit card debt and keeping a bare minimum balance on your credit cards. Try to not close credit cards because this can reduce the available credit you have.
When you have too little credit, this can negatively influence your credit score. Pay all your bills on time and pay any past-due accounts so that they are all current. One way to make this more effective is to make automatic payments so that you never fall behind again.
Learn More About Rebuilding Credit
When you are ready to make a change and want to revamp your credit score, you can work with a team that knows all about rebuilding credit scores. Contact My Credit Repair Clinic now to learn more.