Being wise with our money is something we all need to do, however, we have so much credit at our fingertips these days, managing our money can be difficult. Keeping this in mind, its good to ask ourselves: Is my spending having a negative impact on my credit score? And, does it even matter?
Day to day we may not even concern ourselves with a bad credit score, but it might become a problem for us when we decide to make a larger investment and need a loan, like buying a home for example. This is because a lender will usually refer to your credit report when deciding if they should grant you a loan or not. They will use it to see what kind of history you have with paying bills and how much debt you have etc. So, if you have a bad credit report, what can you do to improve it?
Begin with requesting a free copy of your credit report which you are entitled to once a year. This will allow you to review it yourself before applying for a loan. Next, start paying your bills on or before their due date. If it’s difficult for you to remember when the due date is, it would be a good idea to set up an automatic payment plan which covers at least the minimum amount due. This way it will improve your history of on time bill paying not to mention avoid costly late payment fees.
Are you someone who has collected a variety of credit cards over the years? Go through them and get rid of those you no longer use, don’t just get rid of the card but call the company to cancel it as well. A large amount of credit cards can give a lender the idea that you have too much available credit on your hands and will likely put yourself in economic peril. Keep the longest held credit cards though, as this shows your history of bill paying.
Its never too late to start improving your credit report. This is something to keep in mind when deciding to buy a home.
Day to day we may not even concern ourselves with a bad credit score, but it might become a problem for us when we decide to make a larger investment and need a loan, like buying a home for example. This is because a lender will usually refer to your credit report when deciding if they should grant you a loan or not. They will use it to see what kind of history you have with paying bills and how much debt you have etc. So, if you have a bad credit report, what can you do to improve it?
Begin with requesting a free copy of your credit report which you are entitled to once a year. This will allow you to review it yourself before applying for a loan. Next, start paying your bills on or before their due date. If it’s difficult for you to remember when the due date is, it would be a good idea to set up an automatic payment plan which covers at least the minimum amount due. This way it will improve your history of on time bill paying not to mention avoid costly late payment fees.
Are you someone who has collected a variety of credit cards over the years? Go through them and get rid of those you no longer use, don’t just get rid of the card but call the company to cancel it as well. A large amount of credit cards can give a lender the idea that you have too much available credit on your hands and will likely put yourself in economic peril. Keep the longest held credit cards though, as this shows your history of bill paying.
Its never too late to start improving your credit report. This is something to keep in mind when deciding to buy a home.