Your poor credit history may greatly impact your real estate endeavors. Though your business could currently be self-sufficient enough to not depend on loaned funds, the situation could change in the future. It doesn’t take too long for a couple of late payments to hurt your financial score. A 50-point credit score downfall may not be as significant but it could be the factor deciding your eligibility for your next loan. If your current credit score isn’t where it should be now, don’t worry as there are ways to get around the situation. The following are the 4 ways to improve your credit score.
The first thing you should do when trying to enhance your credit score is procure a credit report copy. Back in the day, you had to undergo a lender or bank for such copies. Today, these copies can be downloaded online within a matter of minutes. Your credit report would detail your listed accounts and where you stand in accordance to them. However, in the process of amending your credit score, ensure you do not further deteriorate things.
Prompt payments add to your credit score by 35 percent. A missed card payment can be an issue – even if you don’t use that card often. A system must be in place to make sure you don’t default with your payments. This could mean automating online bill payments or creating a schedule to keep things organized. If you don’t pay your bills on time, you are directly hurting your credit score. Moving forward, you should make it a point to pay bills every month on time.
Frequent late payments can push your scores down. And this negative impact is due to both the late payment and also for not being on par with your account. Therefore, find out if you are late on any of your accounts. The habit of making payments for the previous month would keep hurting your credit score. Focus more on accounts that are in the delinquency zone, as soon as possible. This should help boost your credit score in almost no time. Prioritizing these delinquent accounts doesn’t mean you should keep your other current accounts on the back burner. Those need deserved attention too so that they don’t swap in places with your current late accounts in the future. Such priority treatment should also be meted out to collections accounts.
Seeing older accounts on the credit report is quite common. A credit card you used in the past could become a collection account and which may be hurting your credit scores. Typically, at the bottom of a credit report, there would be charge offs, judgments, or collections listed down. If there’s a balance, clear the balance off as quickly as possible.
Get Rid of the Delinquent Items
Among the issues with charge offs and old collections is getting hold of the account holder to get the payment through. It’s possible these were a part of your credit report from several years. The person could be someone who was working on your property or taking care of your credit card account on your behalf. Irrespective of who the account holder and what the reason is, you should pay what’s due and clear these items off the list. To speed up this process, you could seek help from a credit repair firm. These are the same companies who you may have seen online or on television promoting their services. Though these companies may not help with genuine late payments, they certainly could help eliminate items that weren’t reported correctly or have already been paid off. These firms have a direct work relationship with credit reporting agencies so that the credit updates come through within weeks and don’t take months. In case there are issues in certain accounts in the report, the credit repair firm would help boost the credit.
As aforementioned, timely payments are critical to maintaining a strong credit score. There’s another thing that comes close and that is low monthly balances. Making payments on time is fine but if your account’s monthly credit balance is low, expect to see your scores taking a hit. Generally, credit card firms fancy seeing you’ve got multiple ways to make your payments. When your account balance is low, your scores go down. Therefore, look at all the accounts on the credit report and single out the ones which are close to the maximum available balance. These accounts could probably be responsible for your low scores. Work to lower the balances each month. The quicker you get this done, the faster you’ll see improvements in your credit scores. With a payment of some additional dollars each month, there could be a major decrease in balance. If you stay committed to this payment pattern for at least six months, you shall see your credit score going up.
After obtaining your credit report copy, you should start working immediately to get your financial situation better. In case you think you could do well with some more help, there are credit repair firms waiting to be at your service. Remember, turning your bad credit scores into good credit scores won’t happen overnight, but it should not take too long. As mentioned earlier in the opening paragraph, a strong credit score can come to your rescue anytime you need financial assistance with your business.