Tips to Improve Bad Credit Score
Your credit score is an essential aspect of your finances. Simple practices like paying your credit card bills on time can save your credit score. However, if you are already there and are looking for tips to improve bad credit score, here are some things you can do:
Avoid closing unused credit cards
If you have any credit accounts that are unused accounts, do not close them all. The length of credit history can help in improving your score. If at all you want to close any account, opt for the newer ones with shorter credit history.
Plan to pay down credit cards
One of the most useful tips to improve a bad credit score is to pay your credit card bills whose payments have not been cleared. When doing so, opt to pay the cards that you have maxed out or are closest to the credit limit. These accounts are the ones that affect your credit utilization rate significantly, and closing them can improve your score.
Avoid opening any new credit accounts
It can be easy to increase one’s credit limit by resorting to additional credit accounts. However, opening multiple credit accounts in a short span affects the credit score. So, if you already have a bad credit score, you may want to avoid getting any more credit accounts unless absolutely necessary.
Get in touch with the creditors
If you are unable to pay your bills on time due to debts, it is best to get in touch with your creditors. You can let them know about the delay and possibly find out a flexible schedule to accommodate this delay. This will help in ensuring any consequences of late payments are negated, helping your credit score.
Explore the possibility of getting a 0% interest account
Several credit card companies offer a plan with 0% interest. This is interest-free period may last for 12 to 18 months. You can transfer your balance to this account and pay off your debts without interest, adding on to it. However, these accounts have strict eligibility criteria and may not be ideal with a very low credit score.
Opt for a debt consolidation plan
Choosing to get on a debt consolidation plan is the best way to get your credit score to improve or to worsen further. It is important to know that opting for a plan as such is a negative for credit scoring as it shows that you are in a bad place financially. But the plan helps individuals get on a better schedule of payments, which ultimately improves the score.
A non-profit credit counseling service or debt consultants guide debtors with these plans. It is important these plans are opted for and executed only under expert guidance.