Your Lowest Credit Score is 530, Why Not Start Fixing It?
What if I told you there is a way to start fixing or removing your bad credit as early as today? Fixing bad credit is really possible, even if you feel like your situation is hopeless.
The major misconception that prevents most people from taking action on their credit is the thought that it’s all or nothing.
In this article, I’ll explain what credit repair is and how it works. I will also provide you with an insight into how bad credit reporting information is collected, monitored, and analyzed so you can figure out the proper steps in credit repair.
There are many steps to take when it comes to fixing bad credit. Please take a look at our expert advice and learn how to delete bad credit and avoid unnecessary complications and mistakes that could set you back.
If you’re having trouble fixing your credit, we can help.
Get educated on your credit score.
Lenders use your credit score to forecast how likely you are to repay your debt. It’s the result of the information in your credit report, but it’s not the same thing as your credit report.
Credit scores are widely misunderstood that leading person to believe they should or shouldn’t do certain things to boost their scores.
But if there’s one truth about credit reports and scores, it’s this: the only way to improve them is through responsible financial management over time.
Your credit score reflects the risk of lending you money.
The most often used FICO score ranges from 300 to 850, with a higher number indicating more substantial credit.
Three credit bureaus—Equifax, Experian, and Illion—create credit reports that include your score based on many factors:
- Thirty-five per cent of your credit score is determined by your payment history, including late payments or delinquencies.
- 30% of the total is determined by the amount you owe.
- The length of time you’ve owned it accounts for 15%.
- Ten per cent of credit is based on the kind of credit utilized.
- The amount of new credit you’ve obtained accounts for 10%.
Related Topic: Good Credit File: Do You Have One?
What is Information Included in a Credit Report?
Additionally, lenders utilize credit records while making loan choices. Each of the three credit agencies has the authority to provide you with one free credit report every 12 months.
These reports may not contain your credit score, but many financial organizations will give you your credit score for free. So paying for your credit score should be unnecessary.
It is wise to practice regularly monitoring your credit reports. To ensure they’re correct and notify the credit bureaus if you see a mistake or other indications of potential identity theft.
Typically, the reports include the following:
Personal data about you
Including your:
- Name
- Address
- Social Security Number
- Telephone Number
- Employment
- Previous Address
- Previous employer,
- And, if relevant, information about your spouse.
Account information.
The report will detail each of your accounts, including the:
- lender’s name
- account number and kind of history
- date the account was established
- most significant amount outstanding you’ve ever had
- current balance
- account’s conditions
- and your payment history.
For instance, it will indicate if you were late and, if so, how late. The report may include information on accounts that you no longer use, so be careful to contact the businesses and request that they cancel the account.
Credit history difficulties. These may include prior bankruptcies.
Find out what’s causing the bad credit and Fix It
1. Deteriorating credit history
Missed payments, insufficient funds in your checking account, and other problems with your credit often indicate that you’re not living up to your financial responsibilities. It may seem that your credit is good enough to handle daily routine living.
2. Poor repayment history
If you’ve borrowed money before, even minor amounts can spell trouble. When you owe money with bad credit, the lender will consider it poor repayment history and may refuse to offer you a new loan.
Whenever you’ve had trouble paying your bills, it may be because you’re operating under the illusion that eventually, you’ll be able to pay them off.
But it would be best if you didn’t plan on a perfect repayment history because your payment history could easily slip through the cracks any day now.
Pay your debts by the due date, even if you need extra time to meet your deadlines. If you skip or fail to make a payment, you’ll be flagged for additional scrutiny from your creditors, and the interest rate will rise automatically on your next payment.
3. Late payments
It is essential to learn how to deal with late payments. Late payments can have a severe effect on your credit score, which could lead to difficulty getting new work or even paying off debt later on.
A late payment can also affect your ability to get approved for future credit. Your lender should know how much you owe and when you will pay it (so they can set a schedule that suits you).
4. Too many credit cards in use
If you carry a balance on your credit card, it attracts more attention from creditors. That’s because if they believe you may not be able to pay the debt, they will be more likely to pursue a complaint with your bank, which could lead to a negative review in the consumer’s favour.
Card fraud and other financial crimes are more likely to occur if you have multiple credit cards active.
5. Untrue information on the report
Even a genuine mistake by a corporation can harm your credit score. It’s easy for companies to get accurate information from some sources, such as state agencies, but fallible and unreliable from others.
A false report can harm your credit score significantly and is almost always a violation of the law. A piece of inaccurate or incomplete information can also lead to identity theft and credit card fraud.
The most significant credit report rule is this: If you have been denied or terminated from a job because of bad credit — even if it was a mistake on your part — it will show up on your report as negative.
The only way to clear that up is to contact each company involved and explain what happened, but that can be difficult if you have been fired or suspended without cause.
Understand the process of fixing it yourself, or hiring a company to fix your bad credit
The ultimate part of this guide is about to begin. If you thought the last section was good, you would love this information. This section will teach you how to improve your credit score and is it worth it to hire a credit repair.’
Assess Your Credit
The first step in determining how to repair your credit is to assess your existing credit position. It is recommended that you obtain complete credit reports from the three credit agencies that supply them: Illion, Experian, and Equifax.
To have a decent credit score, you must have one that is greater than 700. Credit scores range from 300 to 850 points.
The better and higher your credit score, the lower your interest rate and the more likely you are to get accepted. When checking your credit report, search for any negative information.
This could be the result of late payment, a delinquent account, bankruptcy, or collection efforts. These factors can have a long-term negative impact on your credit score and will take years to fix.
Trying to Disprove Inaccurate Information
You may dispute your report if you think it’s incorrect, you can challenge it. If you can demonstrate that statements include inaccuracies, you can file a claim with the bureaus.
You should always monitor these disagreements to ensure that they are resolved.
Once you notify the agency of the dispute, they have 30 days to relay the information you provided to the organization.
Once they establish the information is wrong, they will contact the bureaus to have the inaccuracies corrected in your report.
It would be wise to review all of the report’s other contents as well. Take note of the present balances you owe and the overall amount of credit available to you.
Additionally, it would be beneficial if you ensured that any accounts you have closed in the past are marked as closed and that you are not accruing annual fees. Keep a keen eye out for any open accounts with a history of late payments.
Additionally, the report will detail all of your credit queries. You should go over these and ensure that you recognize each one.
If you do not identify one or more of the inquiries, it is conceivable that your identity has been stolen. This can occur if someone makes a credit card application in your name.
Make Regular Payments
In order to improve your credit on your own, you must make timely payments. Allowing yourself to get behind on expenses will only serve to further ruin your credit. Paying on time can boost your credit score.
It would be preferable if you attempted to set up automatic bill payment for as many items as possible. If you are unable to access this option for a particular bill, pay it a few days early to allow for processing before the due date.
Additionally, there are a few different companies that provide strategies to improve your credit.
This often entails the company sending your good payment history to the credit bureau for each on-time payment, even non-credit accounts such as utilities and rent, in order to demonstrate to creditors that you can make critical payments on time.
Maintain Records Of Your Score
It would be essential if you devised a system for monitoring your score. This will ensure that any questionable activity is detected before it escalates. This type of service is provided by a few different businesses.
Typically, these organizations will not have your precise credit score on hand, but they will have a near approximation.
Paying for credit monitoring can provide additional capabilities such as alerting you if they believe someone has attempted to steal your identity.
Avoid Payoff Scams
As previously said, credit repair does not occur overnight. As with “get rich quick” schemes, there are companies that prey on desperate debtors.
There are a few scams out there that promise to help you eliminate your debt and increase your credit score instantly. It is recommended if you avoid offers like these.
Scams frequently exhibit telltale signals. They may want payment in advance of doing any services for you.
Additionally, they may wish for you to avoid communicating with credit reporting organizations.
Do Not Submit Additional Applications
There are numerous benefits associated with applying for new credit cards. Numerous retail establishments offer a significant discount on your purchase if you immediately apply for their store credit card.
But they do a rigorous credit check every time you apply for a credit card. If you do this frequently in a short period of time, it might have a detrimental effect on your credit score.
Reduce Your Spending
Additionally, it would be beneficial if you considered creating a strict budget for yourself. This can help you spend less money and make only purchases that make financial sense for you.
Numerous apps on your phone provide this type of service. You can enter your monthly earnings and all of your monthly expenses. The software can then determine how much money you can spend each week on food or gas without going over budget.
Is it Better to Fix Your Bad Credit by Yourself or Should you Hire a Lawyer?
Bad credit can be tricky to fix, even after you learn about it.
And even if you fix it, there’s a good chance you won’t be able to keep it under control – or ever get approved for new credit again.
That’s why it’s always important to have legal representation.
Bottom Line
An average Credit Score of 530 means you can’t get approved for a loan. Big bills are piling up. Your debts are out of control.
If you are in debt, there is nothing to do except fight to pay it off and hope that one of the payday loans, or court fees, or salary managers that have gained control of your finances over the years will allow you to pay them off.
We’ve seen examples of people who had their debts forgiven after just one payment, and we want to help you avoid that tragedy by providing you with the bad credit fix that you need.
Call us now on 1300 368 302 to speak with an experienced Australian Credit Solutions who prepares your path to credit independence and financial security.