How to Fix Your Credit Score By Yourself

If you have a low credit score, you may have a hard time getting loans. You also spend more in interest than someone with good credit. For example, on a $150,000 mortgage, someone with a credit score below 620 will spend around $100,000 more in interest than someone with a credit score about 720. You can take steps to repair your credit by yourself. Do it yourself credit repair is simply a matter of constant diligence.

Difficulty: Moderate

Instructions

1. Pay attention to your payment history. Your payment history plays a large factor in your credit score. Companies report when you are late in making payments and your credit report will show whether you were 30 days, 60 days or more than 90 days late. It also shows when you pay on time. To improve your credit score, be sure to always pay your bills on time. If you find that you are struggling, contact the companies you must pay to see if you can change the due date so that it is closer to pay day.

2. Look at your debt to credit ratio. Another factor that plays into your credit score is the debt to credit ratio. This represents how much of your available credit you are currently using. For example, if you have $20,000 in available credit, it's better to only have $2,000 worth of debt than $18,000 worth of debt. To build up your credit score from this angle, you have to pay down your debts. Be sure to pay more than just your minimum balances, which often account for mostly interest payments. You can also try using the Snowball Method for eliminating debt. This involves making the minimum payments on all but one of your debts. Apply extra money toward that debt until you've paid it off. Then, apply all the money that you were paying on that debt to the next one. Some people focus on paying off the debt with the highest interest first, while others focus on paying off the debt with the lowest balance first.

3. Check for credit report errors. One of the easiest ways to repair your credit is to check your report for mistakes. Even minor mistakes can have a big effect on your credit report. The law allows you to receive one free credit report per year. Order this and look it over for mistakes. You may find, for example, that there were unauthorized checks on your credit score, which companies often do before sending you credit card offers. The only official site to receive your free credit report is annualcreditreport.com. Note that the free credit report is only your report. If you want to know your credit score, you have to pay a nominal fee.

Resources

• 37 Days to Clean Credit