Credit Fix

Frequent credit inquires and too many outstanding credit lines
Check your credit score once a year, reporting any errors
In the United States, having a good credit is very important. When applying for a loan, purchasing a car, or purchasing a house, the first thing the bank will look at is your credit score.
Good credit doesn't happen overnight. But bad credit scores happen quickly. Any kind of financial activity may affect your credit score, so it's important to check your credit every so often so that it doesnĄ¯t hurt your credit score or jeopardize larger financial goals.
For example, if you have a credit score of 720 or higher and the interest rate on a 30-year loan would be 6.5%, if your credit score is 619 or lower, the interest rate increases to around 9.5%. That is, if you borrow $200,000 and the interest rate is 6.5%, you pay $460,238, but if the interest rate is 9.5%, you pay $605,419. In the end, you have to pay an extra $145,181.

Your credit score isn't the only factor that determines whether or not you should get a loan, but it's certainly one of the biggest factors in letting a bank make a decision. Therefore, boosting your credit score is very important.
There are at least three things you need to know to build and maintain good credit. First, you need to know what your credit score is and what information your credit report contains, second, how to raise your credit score and lastly, how to fix bad credit. These three things will make it easier for you to manage your own credit score.
First, what is a credit score?
In general, financial institutions use FICO SCORE (Fair Issac Corporation). FICO scores are calculated by adding or subtracting scores based on data from three credit bureaus (Equifax, Trans Union, and Experian).
Factors that affect your score include (1) how often you check your credit, (2) what type of credit account you have (e.g. mortgage or car payments, and credit cards), (3) how many credit cards you use regularly. (4) whether you are making payments on time, (5) how much your total debt is, etc. Also, legal issues such as bankruptcy or a tax lien can be a factor.
The score ranges from 300 to 900, and the method of calculating the score is slightly different for each credit bureau, so in general, banks identify the median scores of the three credit bureaus.
Second, how can you improve your credit score?
(1) It is good to show stability on your credit report. Moving or changing jobs too often can affect your credit score and should be avoided if possible.
(2) The number of credit inquiries should be reduced. Credit inquiry decreases your score by 5 to 10 points. When purchasing a car or seeking a loan, you can protect your credit score by reporting your credit on your own.
(3) Having too many credit card accounts is one factor that hurts your credit score. Having excessive number of open credit accounts can increase the level of credit risk of improper management. Many people open department store credit or store cards because of the 10% discount they initially give and not use them for long term. Closing credit cards that you donĄ¯t use often may increase your score. Also, itĄ¯s not good to have outstanding balance on your credit card. If your limit is low, contact your credit card company and ask them to increase your credit limit.
If you have the same balance of $1,000, a $2,000 limit will have less of an impact on your credit score than a $1,200 limit.
(4) Time will solve everything. It sounds irresponsible, but it is true. For example, if you have had a late payment or bankruptcy before and your credit score has impacted significantly, you should start making the payment on time. As time goes on, timely payments can have a positive effect on your bad credit history, gradually increasing your credit score.
(5) When there is no credit or bad credit, it is better to build credit using a secured credit card. You can increase your credit score by depositing money in the bank, using your credit card within the deposit amount and making timely payments.
(6) Checking your credit report once a year is one way to maintain good credit. You may sometimes find errors on your credit report. This is because of identity theft where your personal or financial information is used by someone else to commit fraud.
Lastly, you need to get rid of bad credit records. Check your credit report for errors. First of all, you need to check that your name (spelling), address, social security number, and marital status are correct. Check if you have more than 10 years of bankruptcy records, more than 7 years of arrears, or more than 2 years of credit check records. If so, you should contact your credit bureau and ask them to have it removed.