Raising your credit score is crucial for building financial health. Obtaining the perfect credit score may seem like a never-ending task; however, there are a few fast ways that can help improve your credit and get you going in the right direction.
Pull, review, and learn your credit score to see which areas you can dispute. You may have been a victim of identity theft, or there may have just been something added to your report in error. Once an error is identified, contact the relevant provider and seek an amendment. Once the dispute is settled, obtain proper documentation and monitor your score frequently to see the jump in your score. There are some things you want to avoid in the disputing process. Click here to learn how to avoid four common mistakes in the disputing process.
Target the debt with the highest interest rate first, while maintaining the minimum repayment on any others. Paying off your highest interest credit card or loan will limit the impact of compound interest on your debts, slowing the growth of your debts overall. Once the highest rate balance is paid off, move on to the next loan.
If you have any debt in collections, it would be a great idea to begin calling those agencies to see how this debt can be settled. Clearing off any debts that are in bad standing will make you more appealing to lenders in the near future.
It can be helpful to connect with an NFCC accredited credit and debt agency to explore debt repayment options. It is a great idea to go in with an understanding of what option is best fit for you.
Entering into a debt management program administered by a non-profit NFCC member agency may be an excellent strategy for those with multiple loans, credit card balances, or substantial balances with high-interest rates. By enrolling in a debt management program, you may benefit from waived or reduced fees—even lower interest rates. These programs help you repay your debts while creditors receive the money owed to them. You pay down your outstanding debt through monthly payments to your NFCC agency. The agency then disburses the payments to your creditors.
Setting aside money is never a bad idea when beginning to repay your debts. If you have a low credit score, opening up a second chance savings account can eliminate the hassle of securing an account with traditional banks. Saving money will allow you to continue with your financial goal setting while having some backup finances for a rainy day.