Five Essential Tips for Repairing Credit

Easier said than done, right? Not necessarily. Just like in any area of life, hard work will bring results if you are trying to improve or repair your low credit score. First State Bank has compiled a list of the top five ways to fix your credit score so that you can get back to living a stress-free life.

1. Check Your Credit Report

You can’t run a marathon without training. Similarly, you can’t start to repair your credit if you don’t know where you stand. To get started, make sure to do your research, and request your free report from an accredited source sponsored by one of the three major credit reporting bureaus—Equifax, Experian and TransUnion. 

2. Look for Credit Report Errors

Once you get your report, look it over and make sure it is correct. If you notice an incorrect record of a late or missed payment, dispute any errors you may find through Equifax, Experian or TransUnion as soon as possible. Small mistakes add up, and if you can catch any made by an outside party, it will be a huge jumping-off point to improving or repairing your credit.

3. Pay Your Bills on Time

It is so easy to get home from work and check out until the next workday. Don’t let laziness or anxiety drag you down. Be proactive about taking care of your credit card payments. Without a good excuse, you will quickly start to see your credit score dwindle. The good news is that falling leads to standing back up taller, so don’t worry—you too can get back up on your feet. Build a solid foundation of good habits and start paying bills on time now, regardless of your history.

4. Pay Attention to Your Credit Limit

Just like when you first start training for that marathon, you need to pay attention to your financial health every month and not push your credit limits. More specifically, your credit card has a maximum amount that you can spend. However, this does not mean that you should feel the need to spend up to that limit. Under-use your card if necessary, as that is one of the best ways to repair or improve your credit score.

Further, know your credit card utilization rate based on your credit limit. If necessary, contact your card lender and see if you can raise your limits. However, be mindful of your spending habits. If you are the kind of person who will start to spend more with a higher amount allotted to you each month, this might not be the best option for you.

5. Limit Credit Card Use

Runners know to never try to run on an injury. If your credit score is low, you should consider refraining from spending any more on your primary credit card until you can pay some or most of it off. Continuing to drain your funds and max out your card will only make matters worse.

If you are trying to apply for a loan, buy a house or make any other big purchase where someone will be taking a look at your credit score, having a low score can keep you from achieving your goals. Raising your credit score can take some time, but it is definitely not a hopeless cause. With solid goals, your planning, time and dedication will pay off. And as always, if you ever need any banking assistance, First State Bank will be here for you!