How to Fix a Bad Credit Report – 5 Strategies To Improve Your Credit
Credit is a mystifying and frustrating roadblock for many people. So, if you’re trying to apply for a new credit card, take out a loan, or get a mortgage, your credit is everything. Therefore, follow these five tips on how to fix a bad credit report and live your best life.
1. Reduce Your Credit Card Utilization to Fix a Bad Credit Report
Excess credit card utilization is one of the biggest impediments to a good credit score.
While high utilization does not necessarily translate to debt, it reflects poorly on your financial habits.
You should aim for 30% or less utilization on all of your cards. Moreover, maintaining a low utilization will show credit bureaus you are a responsible candidate for a credit card, loan, or mortgage.
Lowering your credit card utilization is one of the most powerful ways to fix a bad credit report.
To improve your credit utilization rate, you can request to increase your credit limit.
Be careful, however, to keep your utilization low by reducing your spending even though you’ve have the power to spend more.
2. Apply for a Credit Builder Loan
A credit-builder loan can help you fix a bad credit report by loaning you money to correct it.
These loans usually offered by small banks and credit unions to those customers with poor or no credit history.
You must pay a deposit to be eligible for most credit-builder loans. The money you borrow as a loan gets placed in a savings account until the loan pays off.
3. Write a Debt Validation Letter
A debt validation letter is a way to challenge whether debt on your credit score is actually yours or not.
The Fair Debt Collection Practices Act (FDCPA) ensures you can find out if there is any invalid debt on your credit report.
Follow this format to send a debt validation letter today.
4. Place an Equifax Free Credit Report Freeze on Your Financial Accounts
Freezing your Equifax credit report will not negatively affect your credit score. Your score can still be viewed by authorized users given your permission.
Furthermore, this step simply protects your identity.
If you place an Equifax free credit report freeze on your account, fraudulent users will be unable to open credit cards, request loans, or buy mortgages under your identity.
5. Get Out of Student Loan Debt
They say an education is worth more than gold, but the cost of college tuition can put a hefty strain on your credit report.
As a matter of fact, one way to reduce student loan debt is to refinance student loans.
Refinancing your student loans will help reduce the interest you’re paying on your student debt loans and will help you improve your credit score long term.
Study your credit score carefully to see which areas need improvement. As a result, you will be well on you way to a complete understanding of how to fix a bad credit report.
Consult trusted resources like Creditsquared.com to improve your credit and change your life.
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