The benefits of a great credit score are huge, and a perfect credit score can be the key to your financial dreams! However, a bad credit score can happen, and with this article, I want to show you how you can fix the bad credit score that keeps you from getting money to a perfect credit score that makes financial institutions like banks beg for you to take their money.
What can be the reasons for a bad credit score?
Before we take a look at how we can fix a bad credit score, let's first figure out how a bad credit score can be triggered so that you can avoid mistakes that can kill your credit score and how you can fix each one of them asap.
1. You are late with your payments.
It’s no secret that by not paying your bills, you risk a bad credit score - according to Credit Optimal expert, Robert Ferry. But sometimes payments you didn’t know about can kill your score, too. For example, if you moved to another city and didn’t inform an institution that is sending invoices all day to your old address that you moved, it can happen very easily to hurt their policies fast and makes them take the next step that can get your scoring in trouble. So rule number one to improve your credit score is to always keep up with your payments and to not be late (even unintended). You can ask Robert more questions regarding fixing credit score at Credit Optimal's official Facebook.
2. Your debt was sold for bad reasons.
Whenever a creditor is unable to secure payments from the borrower, they will use third-parties to enforce the collection process. Often the creditors sell the delinquent debt to debt collection agencies after or before charging off their account.
And by sending delinquent accounts to collections, this credential information will be captured by the credit report. Unless you repair such information, you will have a tough time getting any other borrowers to lend you money. And that is for a good reason if you were a borrower with a history of poor collection.
Keep in mind to never let this case happen and always communicate with your creditors. That's the only way you can stop them from selling your debt and with that burning a big hole into your credit score.
3. You filed for bankruptcy.
Whenever a private person (individual) or a company is unable to pay debts, they might be forced to file for bankruptcy in order to receive legal protection. It is probably the most extreme event you can financially experience, and it's definitely the most damaging event to an entity's credit score.
Not only will this information be recorded in your credit report, but it also stays for seven years. To avoid making bad mistakes when it comes to lending, most lenders try to avoid lending to borrowers with bankruptcy and court cases in their history to protect themselves from losing money.
So under any circumstances, try to stay away from bankruptcy and rather borrow money from private people like friends and family and pay them back slowly but to get a bankruptcy into your financial track record.
4. Getting your account charged off
If you don't act as a reliable borrower for too long, the creditor might charge off your account. That will leave a black mark on your credit report, and you won't be able to make any purchases anymore with this account.
To not drop your credit score, you should behave as a trustworthy borrower and keep up with your bills.
5. Defaulting on loans
Sometimes life gets busy, and we forget things. However, what you should never forget is to pay your bills. You can't imagine how damaging missing just one month of a small amount can be until it happens. Your account will instantly be marked as in default, which hurts your credit score.
To make sure that never happens to you, implement a routine and a system to pay invoices as soon as they roll in every month. It’s hard to fix an unpaid invoice that got marked as in default, but it’s easy to prevent this scenario from happening.
But here are my ultimate tips to fix your bad credit score fast and easy for free in 2018 by the most efficient methods available.
Tip #1: Not maxing out your credit cards
It can help very well to not always max-out your credit card to the absolute limit. By not maxing out your credit card, you show banks that you are not dependent on the total volume available and can manage money. That’s why it improves your credit score.
Tip #2: Keep your failed payments as short as possible
Pay your debt back asap. Even if you fell short of a deadline, try to fulfill your payment as soon as possible to prevent your credit score from dropping even more. Sixty days of a missed payment is - of course - way worse than just 30 days of missed payments. Every day counts, so don't waste any time and get your credit score back to good!
Tip #3: Keep the number of unpaid bills as low as possible
It might be beneficial to you if you - instead of paying back the biggest missed payment - pay off several small amounts. For the number of missed payments, you can generally say the more, the worse, and that's why it will help to keep the number of missed payments as low as possible.
We hope this article helped you and that you will be able to improve and fix your credit score rapidly with our tips. I just want to remind you that this is just a general article and that we can not guarantee any results and that you should not consider this as a personal consultation but more as general information and generic tips. If you are serious about getting your credit score perfect, please consider a 1:1 consultation because every situation is a little different.
However, if you follow these tips, you should be able to better your credit score fast and without big mistakes!