If you’re ready to take control of your financial future, you can use Arkansas credit repair to begin digging yourself out of the hole that credit card debt and other poor financial decisions have created. The first step to doing this is to understand what went wrong and how you can fix it in the future. Read on to learn more about Arkansas credit repair, then make a plan so that you won’t have these problems again in the future.
How Do I Know if I Have Bad Credit?
It can be hard to know exactly how bad your credit is—and whether or not you have bad credit. If you’re wondering, take a look at your most recent bill from a major bank. You may notice that it shows your FICO score—this is an important three-digit number that measures your overall financial health and influences what interest rate you get for things like mortgages and car loans. While there are various methods for calculating FICO scores, most fall between 300 and 850; anything below 600 is considered bad. If yours falls in that range (or lower), don’t panic! There are ways to improve it, but first, it’s important to understand why it’s low and where to start.
What Makes Up Good vs. Bad Credit Scores?
Not all scores are created equal. A high score can mean vastly different things for different lenders. When you’re looking for Arkansas credit repair, be sure to check what makes up good vs. bad scores in your state and choose an agency that specializes in repairing your particular kind of score. For example, some agencies specialize in improving scores for people with bad credit, while others focus on helping individuals who are near-prime by addressing small errors and typos from their reports. Some simply edit basic information like spelling mistakes while others go beyond that to boost your income and employment history as well.
Look into each agency’s reputation before deciding which one is right for you. You should also make sure they provide references and contact information so you can ask former clients about their experience working with them. Once you know what makes up good vs. bad scores in your area, it will be easier to decide which services to look into when searching for an Arkansas credit repair company.
Why Does My Credit Report Matter?
It’s easy to ignore your finances, but they can creep up on you if you don’t pay attention. A good credit score gives you access to loans with competitive interest rates and lower monthly payments. It can also get you lower insurance premiums and even affect your ability to rent an apartment or land that job interview. By contrast, a bad credit report can make it hard for you to get any kind of loan, force you into more expensive debt options, and generally lead to more problems with your finances. If anything goes wrong in your financial life, having good credit will make it easier for you to get back on track quickly.
How Can I Improve My Credit Score?
There are many ways to improve your credit score—and just as many myths about how to do so. The truth is that there are no quick fixes; improving your credit takes time and commitment.
Here are some basic steps you can take toward building a better financial future:
- Pay all of your bills on time, every month.
- Make sure you have enough money in your bank account to cover your monthly payments, including rent or mortgage, utilities, insurance premiums, and other recurring expenses.
- Avoid opening new lines of credit unless they’re necessary (for example, if you need a car loan).
- Keep your debt-to-income ratio below 35 percent, which means you owe less than $35 for every $100 you earn.
- Don’t apply for too much credit at once; it will make lenders think you don’t know how to manage your finances well and may lead them to deny your application altogether.
- If you want to buy a house, try saving up to 20 percent for a down payment before applying for a mortgage.
- Consider getting rid of any high-interest credit cards; paying off these cards should be your top priority until you get out of debt completely.
- If possible, pay off your debts with lower interest rates first (like those from student loans), rather than using extra cash to pay down higher-interest debts like mortgages or car loans.
- Save regularly.
- Build an emergency fund with three to six months’ worth of living expenses, which you can use to help cover unexpected costs like medical emergencies or job loss.
- Check your credit report regularly for errors and dispute any incorrect information immediately by contacting the company that provided it (you can request a free copy annually from each of the three major bureaus).
- Be patient!
What Are My Options For Improving My Credit Score?
If you have poor credit, there are several options available to help you boost your score. The first thing you can do is check to see if any of your existing debts have been sold to another lender. If they have, contact that lender and offer to consolidate your debts into one payment at a lower interest rate (and hopefully with more flexible terms). If that doesn’t work, get rid of any credit cards or other lines of credit you don’t use regularly. You should pay down balances on high-interest loans—such as your student loans or car loans—first; anything else should be paid in full when possible, but never carry balances on cards.
In addition, make sure all of your bills are being paid on time every month. Finally, take advantage of free credit monitoring services to track your progress over time. These services will alert you if something seems amiss with your score so you can take action before it affects your ability to qualify for loans or find an apartment rental.
How Do I Use The Improve My Credit Score?
Ask yourself if you pay your bills regularly, and on time. This will determine how long it takes to fix bad credit. If you have late payments and collections accounts that show up on your credit report, then having these items removed from your record can take more than six months. Note that some state laws restrict how much negative information may remain in an individual’s file.
For example, there is no time limit for derogatory information to remain on an individual’s report (maximum of seven years), but bankruptcies must be deleted after ten years from the date filed. A consumer reporting agency may not include any civil judgment data in its files unless such data was obtained by the agency directly from a court or administrative body with jurisdiction over such judgments. The consumer reporting agency also shall delete any civil judgment data received by direct retrieval within thirty days of receipt, unless such data relates to a currently outstanding judgment against you or your property.
Credit Avengers LLC offers to improve your credit score.