How To Fix A BAD Credit Score ASAP

Показать описание

Click “Show More” to see my Favorite Financial Tools

▽MY FINANCIAL TOOLS▽

🏦 SoFi Complete Money Management

----------

💰 Chime Fully Online Banking

----------

💳 Favorite Credit Cards

----------

📊 Wealthfront Automated Investing

----------

💵 Current Card

----------

📸 MY CAMERA GEAR

So first I think it's important to set a realistic goal that this isn't something that's going to happen overnight. It takes time to analyze what is wrong, make the necessary changes, and see these changes positively impact your credit score so just go into this knowing that it's going to take time and you need to be patient but starting now means you can build up you credit score for the next time you need to apply for a large loan. So the first thing you need to do is run your credit report and figure out what exactly is causing your credit score to be low.

If your debt has gotten to the point that it's in collections, then the original institution who issued this credit to you has probably sold your debt to a collection agency for pennies on the dollar and now they're simply trying to make a profit on your financial difficulty. So let's breakdown each of these issues and lay out a course of action that can help you fix these problems ASAP. First off we have late payments which is one of the most common causes of a low credit score since you're on-time payment history is the most important factor of your credit score and makes up 35% of it.

The next common issue that causes your credit to be low is maxed out accounts which simply means you are spending all of the credit that is available to you. So let's say you have a credit card that has a $3000 limit and you spend $2900 of this. Well, that is nearly a 97% credit utilization rate which is absolutely horrible and is definitely the cause of your low credit score. Now on a $3000 credit limit, this does not mean that you can only spend $300 at a time because your utilization is only reported once your statement arrives each month.

So now that you've addressed your late payments and have fixed your credit utilization, your credit score should start to improve rapidly since these are the two most important factors when calculating your credit score. However there is one more important issue that is probably a lot more common than you may think and that is accounts in collection. So just like a late payment, an account in collection stays on your credit report for seven years and can be extremely damaging to the health of your credit. Now, this only typically happens when you haven't made a payment for 150 days or more and this is usually the point when your debt is sold to a collection agency and you'll start getting phone calls from an angry debt collector making all kinds of ridiculous threats. The good news is that the debt collector is just trying to make a profit and they probably bought your debt for 10 to $0.20 on the dollar so as long as they can get anything above that, they'll probably accept an offer and leave you alone. So what this means is if you had $100,000 in debt and you stopped paying on it completely, then your lender probably sold that to a collection agency for 10 to $20,000 because they just wanted to get some of their money back. So you could come in and make an offer to the collection agency for 30 or $40,000 and they would probably accept it since they just want to make a profit and know that they're probably not going to get the full $100,000 from you.

Music From YouTube Audio Library
"Sunny Morning" by Bruno E.

Magnified Money may receive compensation for sending traffic to partnered sites. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired.