Oops I Did It Again: How to Repair Your Credit Score

Let’s admit it, credit can be a scary thing at times. Your credit score can make or break you when it comes to doing adult things like buying a house or getting a car. It seems like it’s so easy to fall into a pit but so hard to get out if it. If you’ve found yourself with not so great credit, know that there is hope. With a lot of patience and due diligence, you can create the light at the end of the tunnel for yourself.

The main culprit when it comes to a bad credit score is racking up credit cards! These cards come in all types. They are offered everywhere you turn. Some of your favorite stores tend to end the transaction with, “Would you like to open up a store card?" and for many, that’s where it all goes downhill. The first step after you’ve realized that your credit score is tanking after maxing out on too many cards is to put them away or cut them up. Once you get to a place where you are consistently paying the balances down, it will be tempting to reach for them and swipe. So having them out of sight and out of mind will stop you from putting yourself right back where you started.

If you have several cards, the best method when it comes to paying them off is the snowball effect. That means attacking smaller balances first. Once you’ve paid off one card, that should free up your budget a bit to move on to the next card. Think of the monthly payment you used to have for a card that you paid off. Even though that monthly payment is now obsolete you can still account for it and add it to the payment that you’re making on the next card. This makes it so that you’re paying your cards down and then some. Remember, always try to pay more that what is owed each month. That’s because minimum payments are usually a bunch of interest with little going to your actual balance. If not, it will probably take you a pretty long time to pay off a card -- even if the balance isn’t that high.

Getting your balances down will definitely have a positive effect on your credit. Try to keep your overall usage percentage at 30%. This means that your balances should only add up to 30% of your credit limit. If you can get it lower than that, even better! Also, when making payments, try your best to not be late. Late payments can have a big impact on your credit score and they almost always come with late fees. Most credit card companies have grace periods that can be as much as 15 days. So if you think you’re going to be late, give your card company a call, and they may be able to work something out for you without it negatively impacting your credit.

Finding the funds to make your payments can be tough. Making sacrifices now to be able to do so will help you out in the long run. That means cutting frivolous spending out of your budget like eating out, going to the movies, or getting your nails done every week. These expensive habits can be substituted with other things like making home-cooked meals, watching a movie on Netflix, or doing your own nails. Think of ways you can cut costs and how to replace your costly favorites with more cost effective replacements. It will be tough now, but think of the pay off in the end.

Practicing all of these techniques should have you on a better path to fixing your credit. It’s a good idea to keep track of it all, and one way to do that is by signing up for Credit Karma. It's a free app that lets you keep track of your credit score with no cost to you. Here, you’ll automatically find both your Equifax and TransUnion report, which are two of the three credit reporting companies. You can  see how many credit lines you have open, and if anything looks out of the ordinary, report it right through the app. In addition, you should request a free copy of your full credit report on AnnualCreditReport.com. You are allowed one free copy every year, and with this, you will get your TransUnion, Equifax, and Experian reports with no effect on your credit score. Always stay informed.

Next time you look at your credit score, feel empowered, because you have all that it takes to get it back on track. Start with these simple steps and take it one day at a time.