How To Fix Bad Credit Score
If you’ve ever had to approach a lender for a loan, your credit score likely has come into play. And if your score isn’t up to scratch, it can impact your ability to achieve your financial goals. Luckily, there is something you can do. This blog will explain how credit scores are calculated and how you can fix bad credit in no time.
How are credit scores calculated?
To calculate your credit score, creditors consider several financial factors, including:
Past and present debt and if you’ve had any issues paying off those debts
Previous loans you’ve taken out and the number of enquiries you’ve made
How timely you have been with past bill payments
If you’ve ever acted as a guarantor for someone else
Credit scores range from 0 to 1,200 and can be excellent, good, average, fair or poor. While there are three credit bureaus in Australia, here’s a look at how one of them classifies its credit score ranges:
Excellent — 833 - 1,200
Good — 726 - 832
Average — 622 - 725
Fair — 510 - 621
Poor — 0 - 509
Identifying the common causes of a bad credit score
A bad credit score doesn’t happen overnight, and it happens to more people than you think. Here are some common causes of a poor credit score:
Missed or late bill payments — Frequently late or missed bill payments can cause your credit score to plummet.
Delayed credit repayments — This is also the case for any loans or credit cards you may have. Aside from being stung with late fees, your credit score also takes a hit.
Multiple credit enquiries — Every time you submit a credit application, it is recorded on your credit file affecting your score, regardless of whether you were accepted or rejected.
Court judgements — Court judgements made against you will be listed on your credit file and remain there for up to five years.
How to fix bad credit with three simple tips
Once you’ve identified the cause of your bad credit score, all that’s left to do is work on mending it! Luckily, credit scores are not permanent, and there are things you can do to improve yours, such as:
Pay down debt — Take care of multiple debts by paying them off one at a time. Depending on what works best for you, you may want to start with smaller ones first or tackle larger debts to minimise costs.
Reduce credit limit or close your credit accounts — If you have trouble managing credit, it may be best to lower your credit limit or close your account entirely to remove the temptation.
Seek professional credit repair — If your debt has reached an unmanageable level, it may be worth consulting with a credit repair company to help you resolve your outstanding debt. These companies work with you to remove black marks from your record to improve your credit score.
Fix bad credit online with Real Credit Repairers
Real Credit Repairers is an expert at getting your credit score back in the green where it belongs. We have extensive experience removing black marks, credit enquiries, defaults and more. Contact us to learn more about the credit repair services we offer.
