woman needs to fix bad credit

How To Fix Bad Credit Mistakes

Many people struggle to fix bad credit these days. However, bad credit is not the end of your life, and we’ll explain to you why.

When you allow yourself to be saddled by bad credit, you’re also setting yourself up for a challenge. Those with bad credit usually pay higher interest rates, face being turned down for general financing, and have trouble successfully applying for everything from credit cards to apartments.

The good news is that your credit score number is never permanent. For the roughly 30% of Americans who have what’s considered fair and very poor scores.

Here’s How You Can Begin To Fix Bad Credit Today

1. Pay Down Debt

The average consumer has about $5,300 in credit card debt. That’s never good news for a credit score. If you have multiple balances to cover, make eliminating your debt part of your overall financial goals.

There are different ways to accomplish this. One is first paying off the debt that is tied to the highest interest rates. Another option is paying off the lowest balances first in full. There may also be an option to consolidate your debt into one payment with one interest rate.

2. Pay Your Bills And Always Pay Them On Time

Arguably the most important way to fix bad credit, paying your bills on time is vital to improving your credit. A full 35% of a credit score is determined by payment history. Organize your bills each month and make note of due dates. Setting up autopay will also take the guesswork out of timely bill payments.

Remember if a bill is 30 days past due, credit bureaus consider it late, and it can be reported to a credit bureau, impacting your creditworthiness.

woman fixing credit paying bills

3. Set A Credit Utilization Ratio Goal

Financial advisers agree that a good way to fix bad credit is to stick to a credit utilization ratio that is below 30%. Credit utilization is determined by diving total debt owed by total available credit. After paying your bills on time, a credit utilization ratio is the second most important factor in your credit score.

4. Establish And Maintain A Long Credit History

When you have a below-average credit score, it seems like a commonsense way to fix bad credit is to get rid of some of your credit cards. Instead, leaving your old credit accounts open will go a long way to improving your credit history — and your credit score.

Credit accounts that are both open longer and have a good payment history tied to them will positively impact your credit score. Even if you have an account you haven’t used for years, consider leaving it open if you regularly paid the balances on time.

5. Diversify

While having multiple credit cards may help your score, it’s also important to have a healthy mix of credit. Having a diverse mix — like a card, a mortgage, and a payday loan or car loan — can be a manageable way to fix bad credit.

One caveat: Refrain from opening several accounts within a small amount of time. That action raises some red flags for credits who may view so many new accounts as very risky.

6. Get Your Credit Report And Review It Thoroughly

It’s difficult to fix bad credit if you don’t know what’s on your credit report. Credit reports usually come from the three main credit bureaus: Equifax, Experian, and TransUnion. Those companies base their credit reports on what certain creditors, including credit card companies, tell them about a consumer’s bill payment history and more.

Federal law permits you to get a copy of a credit report for free each year from each of the reporting companies. Once you get your reports, review them carefully and make note of any inaccurate information, such as accounts that are not yours. Other common errors include wrong account balances and listing late payments that were made on time.

man reviewing credit report

7. Consider A Payday Loan For Bad Credit

Many lenders may instantly disqualify you from receiving a loan if you are unable to fix bad credit. At Cash Cow, we think differently. We encourage those with a range of credit histories to pursue a Louisiana payday loan with us. If you qualify, you can receive a payday loan of up to $300 in as little as 30 minutes.

Just head to our homepage and fill out the short payday loan for bad credit form. Once submitted, one of our friendly loan representatives from a Cash Cow location near you will give you a call and walk you through the rest of the easy process.

Get Started Today

Taking steps to fix bad credit is one of the best financial decisions you’ll ever make. You can make another good decision by pursuing an online payday loan in Louisiana from Cash Cow to help with financial emergencies. Get started online, give us a call, or visit one of the many Cash Cow locations near you today. We’re always here to help.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Emma Frost

Emma Frost is a lifestyle and finance blogger with a talent for communication and a passion for financial literacy. She uses her writing talents to explore topics that help her readers gain financial stability and growth.