Our credit history makes a great impact on our lives, beyond what may appear on the surface. For example, a good credit history will help us to easily obtain loans for a car, a house or other large items with lower interest rates; besides that, good credit history also helps us to obtain more attractive interest rates for our credit card accounts.
Many of us may not know that many companies check their job applicants’ credit history to determine their financial responsibility. So, if you have a good credit history, you will have a better chance to land on the job of your dream.
Now you know how important your credit history is and it is important to maintain it. Your credit history will suffer every time you delinquent your payment on your credit card or loan installments. In some cases, the situation can get worse to the point where repair is almost impossible. Having a bad credit history definitely will not be a good experience when coming to the loan application, but luckily if you are in bad credit situation, with some effort, you actually can turn it around. How quickly it takes to fix a bad credit score will depend on you.
Your credit history cannot be cleaned up overnight. It takes patience, discipline and some strategies to put in place to rebuild the good credit records. Here are some tips to quickly fix your bad credit:
1. Create a realistic budget
The first thing that you need to do is to budget your spending. With a budget in place, you know where your cash flow. Allow some funds for non-necessities, but keep this amount down for the time being. This way, you make sure that your needs are covered, and you won’t feel like you are sacrificing your fun. This kind of budget is easier to stick to than the punitive kind that only allows expenditures on requirements and loan payments.
2. You must cut your spending
Many who try to fix their bad credit failed at this stage because this simple task is always the hardest to implement by most people due to the incurable spending habit. The first thing to change is your spending habit; try to reduce the unwanted impulse purchases first (sometimes it hard to cut it totally) and then eliminate it totally; plan what you want to buy and buy things which are in your budget plan.
3. Have fund in your bank account
Open a bank account and keep funds in it at all times; most banks report to the credit bureaus; this will help build a good credit rating.
4. Get your debt under control
Keep payments current and whenever possible make extra payments on your debt. This will dramatically improve your credit rating over time.
5. Keep your credit account open
Don’t close accounts even you have paid them off; let them stay open but don’t use them. This improves your credit to debt ratio and is one of the fastest ways to rebuild your credit rating and FICO score. This tip is the most important factor to fix bad credit quickly.
The bottom line
If you are already in the bad credit situation, fixing it won’t be easy. But this is the only way to go. Patience & discipline are the key factors to determine the success of turning your credit history and rebuild your credit record.