When you’re first establishing a credit history, it can be difficult to navigate. Mistakes happen, and you don’t always know what may knock down your overall credit score. If you’ve made a few financial mistakes or you have a very fresh credit history, there’s still hope!
There are a few simple steps that you can take to help build your credit score. If you currently have a low credit score, here’s how you can repair it so that you can reap the benefits of having good credit.
Buy Essentials Only
If you use your credit card to pay for unnecessary items outside of your budget, you might find yourself in a difficult situation. You’re not guaranteed to have the money to pay back what you owe. And on top of that, what you sacrificed your credit score for is not even that important to your daily life.
When you make purchases with a credit card, limit yourself to paying for essentials. That way, you’re more likely to have the budget for what you’re buying. Using your credit cards for important recurring costs makes you less likely to overspend.
Pay Bills On Time
If you neglected a bill or paid it late, the only thing you can do to fix your score is to change your payment reputation. It will take time, but you’ll have to keep paying your credit card bills on time each month so that you can bring your credit score back to its former glory.
There are several organizational tools that you can use to help you achieve a goal of timeliness. Apps like Truebill help you to assess the purchases that are charged onto your card and cancels subscriptions that are unused. Quickbooks is another option to help you remain organized, acting as your online accounting assistant by managing your recurring bills.
Pay Off Debt
Debt can have a huge impact on your credit. In fact, the amount that you owe can determine 30% over your credit score. By being proactive about paying off debt, you can start bringing up your score.
Whether you have standing credit card balances, student debt, or personal loans it’s best to take care of it as soon as possible. Debt only accrues interest over time, so the earlier you pay it the less it will affect your credit.