It can be tough when you see your credit score level in the “poor” range, feeling like a less of a human, but although you may not get approved or the best interest rates available, keep the credit accounts that you currently have without opening new ones, and strive to improve your credit rating starting today. Do not give up, with some time and discipline you will be up to the “good” scores in no time.
Start By Checking Your Credit
If you have never reviewed your credit then it may come as a shock when you see for the first time. What you see is basically your entire loan and payment history since you first applied for that credit card when you turned eighteen, not to mention any student loans or car loans. Late payments do not come off your credit report for seven years, so even though you may be current now, past mistakes will unfortunately stay with you a while, but it will get better as long as the late pattern does not continue.
Start to Pay Down Balances
A large portion of your credit report is debt balances versus availability so if you are maxed out, now is the time to cut up those credit cards and never use them again, as you have been living beyond your means for a while now. Start to increase your available credit by paying down balances, and if you have more than one card, it may be wise to pay off the smaller balances first, then cutting the card and keeping the account open, not to mention giving a sense of relief that you have paid off a balance; the start of something good.
Do Not Listen to the Myths
There are many myths out there when it comes to credit and the best thing you can do is to not follow, and if you have further questions look up credible financial planning sources if you are unsure. For one, checking your own credit score does not lower scores, as they are consider a soft-pull and has no impact on your credit score. Also, a charged off account is possible and potentially may not be as harmful to your credit score as you would think. Another is closing accounts with help your credit score and that can be shot down right now. Closing accounts will decrease your credit availability and even though the balance is paid, can hurt your credit score by maxing you out.