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How to Improve Your Credit Score

There are many ways someone’s credit can end up in rough shape. While the main reason is spending habits, that’s not always the case. If you lose your job, or if you’re injured in an accident, or if you have no health insurance and accumulate hefty medical bills, your credit can take a hit. If you miss a few payments, have debts sent to collections, or if your debt is too high – more than 30% of your available credit – it can be hard to catch up.

If you have fair or poor credit, you may feel like you can’t see light at the end of the tunnel. After all, you may be in so much debt and facing so many penalties that you can’t imagine having the ability to get caught up, ever. If you want to see your credit score improve, you’ll need to take action and make some changes, and it may take some time to see your scores go back up.

Most Negative Information Lasts 7 Years

When it comes to credit, the most negative information will stay on your credit report for 7 years (10 in some cases), however, the effects of blemishes do lessen as time goes by, so long as new blemishes do not show up. But the idea of waiting 7 to 10 years should not dissuade you. Remember, a poor or fair credit score that lasts indefinitely can cost you a small fortune. Case in point: imagine the cost difference between getting an auto loan for 20% vs. 3%.

Over the course of your life, having a bad credit score for years, if not decades, can cost you thousands of extra dollars. That’s shocking, but it’s also a reality check. A bad credit score means all of these things and more:

  • Higher interest auto loans
  • Higher interest home loans
  • Higher interest credit cards
  • Higher car insurance payments

Bad credit not only costs you money, but it can affect your major life goals, like going back to school, buying your own home, paying for your child’s college education, taking annual vacations with your family, and even retiring when you want to. Why? One key reason is that you’re throwing so much money away on extra interest.

Next: How Bankruptcy is Removed from a Credit Report

Are you saddled with bad debt and is your credit score undesirable? The good news is you don’t have to be stuck with bad credit for life. In fact, many debtors are able to file for Chapter 7 or Chapter 13 relief, and as a result, they rebuild their credit much faster than if they had never filed bankruptcy, to begin with.

To learn how bankruptcy may help you salvage your credit in a shorter time span, contact our York bankruptcy firm today.

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