Looking to get a loan with bad credit? Fix your credit score first! Fixing credit score is a must if you find it hard to get your credit applications approved. That is the rule of the game that you have to follow in this credit economy. Fact is when you apply for a loan lenders will look at your credit score to accept or deny your application.
Lenders usually assess past credit information to predict future outcomes. They look at your credit score to learn about how well you manage credit in the past. With low credit score chances are your lender will deny your loan application or if they will accept it you can only get small amount of money with high interest rates and shorter time frame to pay.
Now that you know the disadvantages of having a low credit score it’s essential that you take steps to fix your credit score.
Ways to Fix Your Credit Score
1. Get your credit reports. You are legally entitled to free credit reports from all the three credit bureaus every year and you should take advantage of that. Once you have all three credit reports, the next step is to check for any inaccuracies and then to dispute the errors you find on your credit reports or contact each creditor falsely reporting a debt against you.
2. Deal with late and/or missed payments. One of many factors that affects your credit score is how prompt you pay your bills and how long you have paid on time. You want to keep track of all your bills and then pay your bills on time. Once you’re back on track talk to your creditor and explain why you didn’t make timely payments.
3. Control your monthly spending. Another factor that affects your credit scores is how you use credit. If the outstanding balance is constantly close to your credit limit, that’s a sign that you have trouble with your finances. For this reason it is important to keep your balance low, never going beyond 25% of what your credit limit is.
4. Don’t close any credit card account. If you have credit cards that are unreasonably expensive to own and wish to get rid of them, don’t do it. It could hurt your credit score. With one less line of credit open to you, you’ll suddenly have your credit utilization ratio jump up from it used to be.
5. Pay off your outstanding debts. If you have too many outstanding debts and you feel that you can pay one debt in full, pay it. If not, consolidate it. Find a company that will speak to lenders on your behalf. They will be able to consolidate all of your outstanding debt into one lump bill that is both affordable to you and satisfactory to your creditors.
6. Don’t apply for a loan to more than one lender at almost the same time. Don’t do this as lenders may see you as too desperate for money and this would most likely lower your credit score. If you just want to make sure that you will get a loan, try waiting for one response before starting an application in another.
Work with a Pro to Fix Your Credit Score
As you see, the above tips to improve credit score requires a lot of effort and time. Depending on how complex is your financial situation you can do some of the above steps by yourself. If you want to go even further, however, you can also hire a credit repair lawyer that will fix your credit score for you.
Reputable credit repair companies would offer to fix your bad credits in a matter of weeks. These offers could be very attractive for you if you have a low credit score and you want to have it fixed as quickly as possible to get your credit application approved. Keep in mind though, that fixing a credit score is hard, even for the pros.
The best way to be sure that you hire the best service is to research some of them. Make sure that they are legitimate to do business with. Avoid agencies that promise quick fixes and that resort to unethical credit repair measures to fix your credit score because they can get you into more trouble. Only work with a reputable lawyer that can help you get a loan with favorable terms.