Repairing My Credit Score: How Do I Do It?

how to repair credit score

According to a credit repair company in Austin, from obtaining a loan for a home to getting a new cell phone, your credit score can impact many different aspects of your life. Below, we’re going to take a look at why your credit score may be going down and what you can to do build it back up. 

What Makes Up A Credit Score? 

One of the most frequently asked questions surrounding credit is what can cause your credit score to go down into the “bad credit” realm. According to Expedia, any score below 499 is considered to be bad credit. To understand how to better your credit score, we must understand the factors that go into it. 

Late Payments

Your payment history is what spells out 35% of your credit score, making it the most substantial chunk of the bunch. - Amount Owed: 30% of your credit history deals with what you owe on each account and the total amount that you owe overall. 

Credit History 

How long your accounts have been open and active makes up 15% of your credit score. 

Types Of Credit 

10% of your credit score deals with how many types of credit that you have. It’s more desirable to have multiple types of credit (mortgage, credit cards, student loans, etc.) than to have all student loan debt. 

New Credit 

Another 10% of your credit score deals with the number of new accounts open and the number of inquiries that have been made by separate entities about your credit history. 

Fixing A “Bad” Credit Score 

The first step of fixing your credit score is aware of it. Be sure to utilize one of the many websites and apps available that allow you to check and monitor your credit score. Contrary to popular belief, checking your credit score doesn’t lower it at all. 

Once you get a hold of your credit report, take an in-depth look at it and look for any inaccuracies or mistakes. If you see anything that you know is wrong, try to dispute these if possible. 

Since 35% of your credit score deals with your payment history, it’s important to schedule your payments down to a science. Utilize any autopay services that you can to make sure that your debt is paid down on time, every time. Also, paying the debt down as quickly as possible is incredibly important as well. Start with the obligations that have the highest interest and pay more than the monthly payment, if you can. 

Additionally, getting a new credit account may give a little boost to your credit score. To prevent yourself from piling on more debt, don’t carry a balance on the new account. This increases your credit to debt ratio and makes your score go up. 

How Long Will It Take? 

One of the most important things to understand about bettering your credit score is that you need to be patient. If you implement healthy financial habits, you may start seeing changes on your credit score anywhere from six months to a year from now. But, remember that bad credit doesn’t last forever. Be diligent in your healthy financial habits, and soon you’ll begin to see your credit score rise.

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