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Credit scores are important to your financial health. A good credit score will get you the best rates on loans and can even impact your ability to get an apartment or job, as some landlords and potential employers run credit reports during the candidate screening process. However, sometimes people make mistakes that can severely impact their credit score if they don’t work to rectify it as soon as possible. If you’ve fallen on hard times or didn’t practice good money management skills in the past, don’t be embarrassed as it happens. The important thing is to fix your credit as soon as possible to get back on the right path.

Understand Your Credit Report

One of the first things you should to while trying to repair your credit is have a thorough understanding of your credit report and what items are negatively impacting your score. You can pull your report form the major credit bureaus, including Equifax, Experian, and TransUnion to determine what areas you need to improve in and what you can do immediately to get negative items off your score. Sometimes there are errors on your report that you can address right away, so if something doesn’t look right bring it to the creditor’s attention so they can have it removed.

Pay Bad Debt

If you have bad debt bringing down your credit score, make arrangements to catch up on these payments and get the debt off your credit report. If you make an attempt to work with debt collectors and creditors they may be able to offer you a reduced payment option if you agree to have the debt paid off within a certain amount of time. You may want to consider working what a credit counseling agency to help you come up with a repayment plan that works with your budget.

Schedule Future Payments

You don’t want to fall into the trap of getting behind on payments again. Take inventory of any bills you pay on a regular basis and make it a habit to pay them on time. You can set up calendar reminders to notify you when payment is due or take advantage of setting up auto pay for your accounts so they automatically come out of your account each month without you needing to think or worry about it.

Get the Right Type of Credit

It may seem counterproductive to obtain more credit to help your credit score, but if you can show that you have a history of making timely monthly payments on an installment loan, you can drastically increase your score over time. One of the things you may want to consider is establishing credit with a car loan. Cars are often seen as a more practical purchase than a credit card, which allows you to use your credit card however you want each month. Car loans serve a specific purpose and a reliable vehicle is a practical thing to have to get you to your job, which earns you a living.

Learn Good Financial Habits

If you hurt your credit score by neglecting to practice good financial habits, you need to address that issue as soon as possible so you don’t fall into the same habits that could only hurt your credit more. There are hundreds of helpful articles online that can teach you how to practice good spending habits and manage your finances, including setting up a budget and separating wants versus needs when it comes to making purchases. If you think you’d benefit from one-on-one guidance, set up an appointment with a financial advisor to have them teach you about good financial habits.

It can take time to rebuild your credit, depending on how bad your score was when you decided to make a change. Do your best to adhere to these tips and remember not to be too hard on yourself if you slip up. Everyone makes mistakes and the important thing is to learn from them so you don’t repeat them in the future.

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