Best Way To Fix Credit Scores

Credit is similar to any relationship that is built on trust. In order to maintain a good relationship, both parties must maintain mutual trust. Once that trust is broken, it takes times to rebuild. The best action to take in both instances -- relationships with friends and relationships or with creditors -- is to simply refrain from breaking the trust. It is essential to maintain a good credit score in order to make purchases for instance homes. There are several steps you can take in order to maintain good credit and good relationships with your creditors.  The best way to fix credit or maintain good credit is to:

1. Know Your Numbers
2. Monitor Spending
3. Keep Credit Limits Low
4. Pay AT LEAST The Minimum
5. Pay On Time
6. Montior Your Credit
7. Find A Way To Establish Credit

Here is more detail on the suggestions above…….

1.  Know Your Numbers

A doctor tells patients to know their numbers--blood pressure, weight, etc. As with physical health, individuals should know their fiscal numbers in order to maintain good fiscal health.  The first question to ask is, “What is my credit score?” This is especially important if you are considering buying a house. The next question is, “what credit score do I need to buy a house?”

2. Monitor Spending

Check weekly to reconcile accounts. Check online statements to ensure that unauthorized charges have not been made. Inspecting accounts more frequently will help decrease unnecessary spending.

3.  Keep Limits Low

Because credit is based on the amount of credit that an individual uses and has available, maxing out cards is a bad idea. It is also a dangerous practice considering that emergencies can and often do occur. A seldom unstated rule is to not use credit for perishable items. If necessary, use it for assets, emergencies and things that appreciate in value.

4. Pay AT LEAST the Minimum

Pay at least the minimum balance on accounts every month, and never skip payments. It is actually best to pay three times the minimum in order to decrease the overall interest that will have been paid.

5. Pay on Time

It is not only important to pay the minimum, but to pay it on time. On time means on or before the date due. The reason for this practice is that some companies consider payments late, even one day after the payment is due, others allot for a grace period. It is difficult to remember what is late with whom, so make all payments before the date due.

6. Monitor Your Credit

There are services that monitor credit and send a report every month for all three bureaus. At least once a year, individuals can request free copies of their report. At the very least, opt to obtain the three free reports and dispute any discrepancies immediately.

7.  Establish Some Credit

Some individuals think not having credit will keep them from having a bad credit score when in fact, having zero accounts makes it difficult to get more accounts, which can cause problems down the road. Keep everything in moderation, seeking to open a few accounts and not all at once. A good rule of thumb is to have two major credit cards and one store credit card. 

Keeping good credit takes effort but in the long run, it makes life easier when you have that unexpected issue or need that requires money.