Having a bad credit score can impact many aspects of your life. Negative credit could prevent you from getting approved for a loan or a lease on a new apartment. Rebuilding your credit score takes time, but the effort is well worth it to regain your financial freedom.
Pay your bills on time.
One of the largest factors affecting your credit score is how quickly you make your payments. Making late payments makes it difficult to catch up with your payments and your debt will continue to grow. Set reminders for yourself to pay your bills on time or use an automatic payment system. If you cannot afford to make all of your payments promptly, contact your creditors and arrange a payment plan. A delinquent payment history reflects negatively on your credit score for years, so keeping your accounts current is important.
Do not apply for more credit cards.
It may be tempting to open new credit accounts when you are struggling with bad credit, but this can make your score even worse in the long run. Those with negative credit often encounter higher interest rates, and too many new credit applications can damage your credit score. Focus on paying off your current credit card debt before opening new accounts.
Keep old accounts open.
Closing a credit account when you have paid it off seems logical at first. However, closing these accounts is detrimental to having a history of good credit. Keeping old credit card accounts open—especially if you have already paid them off—reflects positively on your credit score.
Read your credit reports.
Reviewing your credit reports every month can help you catch any mistakes and correct them before they make your credit score worse. In addition, you can request to have any outdated information removed (more than seven years old) from your credit report, especially information that may be negatively impacting your score.
Sell annuity payments to pay off debt.
Paying your bills on time and keeping your debt low is the most impactful way to rebuild your credit score. However, you should avoid taking out more loans to make the payments, as this can make your debt situation worse. If you have a structured settlement or annuity, you can sell your payments and put it towards paying off your debt. Novation Settlement Solutions can help you get cash for your structured settlement or annuity if you need funds now. Call today or use our online form to get started with Novation.
*Novation is not a financial advisor and/or consultant and strongly recommends that you speak to a lawyer and/or accountant before making any significant financial decisions.