So you have bad credit loans? Luckily you’re not alone. Millions of people struggle with the same problem. But you can fix it! Repairing your credit can be easy with bad credit refinance, but it probably won’t be quick. The problem with your credit is that it compiles the good and bad of years and years of credit history, good and bad, to compute your credit score.
-DON’T MISS A PAYMENT
This is the biggest no-brainer, but it’s importance cannot possibly be stressed enough. A single missed payment on a small credit card might not be too big of a deal, but that missed payment will sit on your credit report for at least seven years. Make more than one or two missed payments, and it will really start hurting your credit score.
-DON’T OPEN OR CLOSE A LOT OF TRADELINES
Tradelines is a fancy word for credit accounts. If you a lot of accounts at once, it will ding your credit. If you close a lot of accounts at once, it will ding your credit. One of the ways credit score is calculated is by your credit history and how long you’ve kept some of your credit open.
-DON’T LOOK AT YOUR CREDIT OFTEN
Don’t let anyone look at your credit. By alowing creditors to “pull” your credit, you are reducing your credit score. It assumes that by letting creditors pull your credit, you are applying for more credit. If you’re curious about your credit and want to know it for yourself, you are allowed one free report each year.
-QUIT USING YOUR CREDIT CARDS
Many people use their credit cards too much and pile up too much debt. That, however, is terrible for your credit. The three main credit bureaus (Equifax, Experian, and TransUnion) use what is called “revolving usage.”
-TAKE OUT A SHORT-TERM INSTALLMENT LOAN
An installment loan is a loan that has a set payment every month. A good example is a mortgage loans or auto loan. For example, you might be paying $400 per month for 48 months on an auto loan. These loans look good on your credit score and can easily be set up for automatic payment, making it almost impossible to miss a payment!
-AVOID CREDIT COUNSELING SERVICES
You might save a few bucks up front with credit counseling, but it will cost you much more down the road. Credit counseling services will negotiate with your creditors to reduce your debt. Unfortunately, your credit report will read that as your inability to live up to your end of a credit contract.
-CONSOLIDATE YOUR CREDIT CARDS
The best way to consolidate your debt is to wrap it all together with your mortgage. Either refinance the first mortgage or take out a second. Then cut up every credit card but one. Don’t close the accounts…just get rid of any possibility of using the account again.