Repair Bill: Fixing your credit filled with flaws

Posted By: Matt in Credit on 03/25/2016 at 11:40:24

It's the old "he said, she said" when it comes to fixing your credit.

Someone tells you that this particular move makes the most sense, and will instantly (or over time) inflate your credit score, while some argue that some other action is your better bet for adjusting that score for the better.

The truth is some actions to get your credit score back on track are better than others, while some are just plain ill advised.

The easiest and best way to keep that three digit score in a good place is to make timely payments and not to miss payments on a regular basis, which is why the majority of people take the automatic billing route when it comes to paying.

The ultimate goal is to decrease the amount of debt you have totally, but also keeping in mind that the debt to credit limit score is paramount. For instance, if you have a credit card with a high balance that is nearly the entire amount of total credit on the card, focus on that one first. Creditors frown upon that and also the total amount of debt you carry. That's why during the time when you're trying to decrease your debt, you have to stop applying for new and focus on paying down what you have. Focus on the loans or debt that have the highest interest rate first and foremost, while others that have lower rates or even zero (such as agreed upon medical debt repayment or low rate school loans) should be saved for last.

Where a lot of misconception comes into play is when you're talking about credit cards specifically that you have and aren't using. The thought process is you should be closing cards left and right, but be careful because that does lower your score but if you're in the process of applying for a loan, closing accounts could actually hurt you long term.

You also can open new lines of credit; that isn't going to hurt your credit score unless those lines of credits, credit cards specifically, are opened and maxed out. Transferring balances isn't the best option but is one that can save you money and interest over the long haul.

In addition to transferring, you might want to increase your credit limit. As much as that is perceived as a bad thing, credit utilization will increase and so will your score.

That score is going to define your ability to borrow and how you're perceived from creditors. That involves assigned interest rates and how much you'll have to spend, or overspend, when you borrow and thus leading to the ability to save money.


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