How To Fix Your Bad Credit

If you’re a mom and you’re starting a business – or you’ve been running one for a while now – you’ll know that it can be hard to juggle everything all at once. Sometimes that means that a ball has to be dropped, and if that ball happens to be your finances, it can take a while to pick it back up again.

However, if your credit score is low (or falling) then it’s best to do something it right now – or as soon as possible. A poor credit level can affect your home life due to stress, as well as your ability to obtain credit. When it comes to your business that can all have a knock-on effect, and everything can suddenly be a lot harder than it needs to be.

If this all sounds familiar, don’t worry; here are some ways you can fix your bad credit and get on with your business and your life.

Check Your Credit Reports

There are a number of different credit bureaus that you can ask for your credit report from. Try to check as many as possible, such as Equifax, TransUnion, and Experian, as you will get a better idea of where you stand. Once you receive your report make sure to go through it thoroughly; understand what your credit score is means you’ll know whether you need to do anything about it or not.

If your score is low, or lower than you expected, you know that the next step is to fix things. Make sure first, though, that there aren’t any errors on your report. These can happen without anyone realizing, and they can make a big difference when it comes to your score. The wrong address might be linked to you, or a name that you have never seen before. It might be that an old account that was closed many years ago is still showing. Dispute the errors as soon as possible and this will help to fix your credit.

Get A Credit Card

If you’ve got bad credit then the idea of getting another credit card might not appeal, but this can actually be a great way to build your credit up again. There are special cards available that are designed for those with poor credit; click here to learn more. This means that you are more likely to be approved for such a card, even with a bad score. They will have low amounts of them, enabling you to use them and then pay off the entire balance. This looks good for your credit and will show that you are able to use a credit card sensibly. Your score will soon improve using this method.

Pay Off Your Debts

Having a lot of debt in comparison to your income and your available credit is something that can make your credit score suffer terribly. Therefore, you will need to look at paying that debt off sooner rather than later.

What are the unnecessary expenses you’re currently paying for each month? Take a look through your finances and cut back where you can, even if it’s only for a short while as you pay off your debts. Use the money you would have spent elsewhere to pay more than the minimum off your loans and credit cards, and you’ll start to make a dent in the amount that you owe.

The longer you can make these cuts and the more money you can save, the sooner you will pay off your debts and be able to be much more financially free. It’s definitely worth doing.

Check the Interest

Unless you’re on a special introductory deal, whatever you owe is going to have some form of interest attached to it. When you’re saving money to pay off your debts, it’s best to pay off the debt with the highest interest first. You’ll be able to save more money in the long term in this way.

Once those debts are paid, look at the newest ones and pay those ones off next. This will leave you with the oldest, cheapest debts to deal with. These are less harmful to your credit, so if you are unable to pay off anymore, these are the ones that can stay if need be. However, paying everything off is a far better idea if possible.

Keep Accounts Open

It can be tempting – and highly satisfying – to close accounts down as you pay them off. However, as strange as it may seem, this may not help your credit score. That’s because the more credit you have that you’re not using, the better your score will be. So, by keeping at least some of the accounts open but not spending on them at all, you can build your credit even more quickly.

If you think you might be tempted to spend, make sure you securely dispose of the credit cards themselves and it will be much more difficult to use them.

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