May 28, 2021 12:27 PM EDT
Every so often, you hit a year where everything goes wrong. For many folks around the world, 2020 was that year. Between the pandemic, rampant injustice, and economic struggles, it's no surprise so many people continue to feel the repercussions of a year gone wrong.
One of the most common things people have struggled with the past year is their finances. Money troubles happen can happen to anyone, especially during times when the economy is not firing on all cylinders. If you need help with your credit score, the following tips will help you improve your credit going forward:
Working the Report
Get your credit report as soon as you can. You're entitled to one free credit report each year, so make sure you obtain it so that you can study it. What you want to do is address some of the most pressing issues. Find out what's hurting your score, and see if you can reach out to the creditors you owe money to. Be honest about your situation, and try to work out a payment plan. This step shows that you're willing to do your part to repair credit relationships.
Dispute False Items
That credit report could have errors. It could have accounts that aren't open anymore, or you might see accounts you've never opened, yet they're under your name, which could be due to identity theft. Any little false information you find on your credit report could be hurting it. Find a way to dispute these claims against you. This could be done over the phone, through emails, or even through the mail. Depending on the error, it could help you improve your score, which is something you need right now.
There are loan agencies out there willing to lend you a hand. These folks are eager to lend you a small amount of cash even if your report is less than stellar. A loan agency or loan service can help you establish positive credit history in a short amount of time. The loan will come with a few restrictions, and it will be small, but you need to accept these terms for now. You're trying to repair your score, and these folks are giving you a path.
Avoid New Credit Lines
A new line of credit is going to be very tempting to someone in your situation. You're already dealing with financial issues, and a little extra money could help you out right now. Use the loan idea mentioned earlier, but don't consider opening a new line of credit. That's a hard inquiry on your score, and that's going to impact it negatively. Not only that, but you may also obtain it, and that's going to put you in even more debt when you haven't even stopped financial drowning now. Stay away from new credit lines until you're in a better position.
You must rethink your spending habits. Go through everything you spend, write it down, and eliminate what you don't need. Eliminate some streaming services and other things you don't need. Avoid eating out so much, shop at discount stores, and consider buying in bulk whenever possible. Do whatever you need to do to reduce the amount you spend each month. This should help free up some of your money so that you can start to pay off debt faster. It's not going to be easy to do this, but it's worth it.
These are some steps you can take, but there are others like consolidating your debt if you need to. Talk to a financial advisor to see if there are other things you can do to try to recover from a tough year and come back stronger.
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