Having a low credit score can seriously impact many areas of your life. You may not be able to buy a home or car if your score is too low. If businesses do approve a loan for a home or car, they will probably charge you a high interest rate.
You might have trouble renting an apartment if your credit score is low. If you are allowed to rent an apartment, you will likely have to pay a large deposit. You may also have to pay more for companies to turn on your phone, utilities and cable.
Because of the problems you may face when you have a low credit score, it is best to improve the score as quickly as possible. Negative information regarding late payments will stay on your credit report for seven years. If you declare bankruptcy, that information will remain on the report for ten years.
In spite of these obstacles, there are things you can do that will increase your score quickly. Paying down your debt will improve your score. If you are behind in your bills, make an effort to bring all accounts up to date.
If money is tight, and you are having a hard time paying your bills, speak with your creditors. They may be willing to lower your interest rates. This will decrease your monthly payments and allow you to pay down your debt more quickly.
Avoid applying for additional credit. This will lower your credit score.
Request copies of your credit reports from Equifax, TransUnion and Experian. Review the reports carefully to make sure that all of the information is accurate. If there is inaccurate information on the reports, dispute it so that it may be removed. Getting the incorrect information off your credit report will improve your score.
Make sure that all of your positive account information is included in your credit report. If there is account information missing, and you paid the creditor on time, it can increase your score. Get the reporting agencies to add the information to your credit report.
Taking these steps can improve your credit score in a short period of time, but you should be aware that it may take longer to see a major increase in your score. That is because negative information stays on your credit report for seven to ten years.
It is illegal to remove accurate negative information from your credit report. Therefore, be careful about paying companies that claim they will improve your credit score or erase negative information from your report.
It may take a lot of effort to pay down your debt and improve your credit score. However, it can be done if you create a budget and stick to it.
Rick Silver is a Financial Writer and contributor to Everest Forex. She spent many years working at leading U.S. investment firms and banks, within the fields of foreign exchange, commodities, structured finance, asset finance and corporate finance.
