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Why You Should Fix Your Credit Score

Loan application approved illustration

There are so many reasons why you should start on the path to credit repair. With a better credit report and good credit score, you’ll save money on interest rates, pay lower security deposits, and you may be able to also find lower insurance rates, receive higher credit limits and stop debt collector harassment.

Not only that, but you won’t have to cross your fingers the next time a lender pulls your credit before you make a big purchase like buying a new house or a new car. You’ll have the confidence you need knowing that your credit score is high enough to cover what you need. That kind of peace of mind is priceless!

Here are six quick tips to consider as you fix your credit:

  • Check your credit report for accuracy. According to 1 in 5 Americans have mistakes on their credit reports and these credit report mistakes can lead to disqualification for mortgage or auto loans as well as increased insurance premiums and interest rates.
  • Pay down your current credit card balances and stop making new purchases with credit cards. In fact, you may want to put your plastic on ice. Literally. If your credit cards are frozen in ice then you’ll have plenty of time to decide whether that purchase is a want or a need.
  • If you’re worried about taking out a credit card, consider a Credit Builder Loan to help build up your credit score.
  • Don’t close old credit card accounts once you have them under control, as this can affect your credit utilization and make it harder to build a solid credit history. Keep those credit card accounts open, but wisely use them.
  • When you’re ready to shop for new credit, like a mortgage or auto loan, rate shop during a 14- to 45-day window (depending on the scoring model). Most credit scoring models will group inquiries by type in that time frame.
  • Consider paying outstanding collection accounts. Some newer credit scoring models ignore paid collections entirely.

Don’t give up! If you build good habits over time, you’ll fix your credit and maintain good scores.

Take the first step and schedule a free credit review with us at Alltru Credit Union. We’d love to help!

Until the next time,

Katie T.