How Credit Repair Can Help Build Your Credit Score

August 12, 2021

Find out why credit score is important when it comes to securing a loan and how credit repair can help you raise your credit rating.

Your credit score plays a big factor in your ability to secure your next loan. As such, building a good credit score should be a long-term goal for individuals and even businesses.

How credit repair can help you build your credit score
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How Credit Repair Can Help Build Your Credit Score


    Benefits of a good credit score


    Most borrowers know that having a good credit score is like having a high trust rating, thus playing a significant factor in their loan approval rate.

    However, not many people know that, aside from how fast they can get their loan approved, a good credit score will also allow borrowers to negotiate for attractive interest rates and payment terms. As such, the importance of a high credit score cannot be overemphasized.

    How one’s credit score goes down


    Several factors contribute to the drop in one’s credit rating. Unfortunately, there are still some people who are not aware of the value of being creditworthy and may unknowingly do things that can negatively impact their credit score. Small factors such as not paying monthly dues on time can pull one’s credit score down.

    On the other hand, some factors are beyond the borrower’s control that have contributed to their low credit score, such as the inability to pay amortization because of job loss during the pandemic.

    In the end, borrowers need not lose hope even with a low credit score because it can still be rebuilt through credit repair.

    Raising your credit score through credit repair


    Credit repair is simply the practice of employing a variety of techniques to elevate one’s credit rating. There are several ways to do it and they are fairly easy to follow. All you need is the discipline to stick to a routine and you are on your way to building your credit score.

    Here are some of the ways to do it:

    1. Check your transactions for possible fraud if you are using a credit card


    This is indirectly related to your credit score but you might want to check your credit card statement if all the transactions listed there are valid. You might have been defrauded and might be paying off an excessively large debt that you did not incur.

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    If you see any suspicious transactions, report them to your bank immediately for a quick fraud investigation and resolution.

    2. Consolidate your debts


    If you are paying off several loans, you may sometimes find it hard to keep track of your due dates. You may miss paying on time, which means that you will incur additional interest charges. The combination of numerous due dates and varying charges can be overwhelming at times that’s why it’s a good idea to consolidate your debts.

    Debt consolidation is a service offered by financial institutions that combines your debts from various sources into a single loan.

    That means that you only have to keep track of a single due date and pay off only one monthly interest expense. At times, you might even be paying a lower interest rate through this setup.

    To learn more about debt consolidation and credit repair, you may find some helpful information here.

    3. Take advantage of loan restructuring


    You can also apply for loan restructuring. Again, loan restructuring is a service provided by banks and other lending institutions that give borrowers easier payment terms if they are having a hard time with their loans.

    Loan restructuring may involve lengthening the due date and modifying the monthly amortization and interest rates.

    4. Pay off your existing debts on time


    Even if you have been a delinquent payee for your existing loan because of reasons beyond your control, you can still make up for it once your finances begin to stabilize. All you have to do is to pay your monthly amortization on time and that will have a positive impact on your credit score.

    5. Use your credit card responsibly


    If you have a credit card, it’s also a wise idea not to close it. Why? Because using your credit card wisely and paying off your monthly dues on time will influence your credit score favorably.

    Epilogue


    Your credit score is an important aspect of your overall financial health. A good credit score can help you secure loans and negotiate attractive interest rates and terms. This is especially advantageous to you during emergency situations or if you simply need some funding for your personal and family needs.

    There are times when a person’s credit score may slide down, a good example of which are those whose business or livelihood was hit by the pandemic. No need to worry though because you can still build your credit standing through credit repair.

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    14 comments

    1. This is a great post. I tend to use my credit card as a debit card, meaning I try to pay off my balance as quickly as possible. With this method, i've been able to keep a pretty high credit score! Great tips.

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    2. Wow this is ver helpful blog.
      Thank you for sharing this blog.
      Personally i don't know about Credit repair and Credit score.
      Because of this very informative blog I've got an idea about this things. Now I am aware about this.

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    3. My additional tip: never use your credit cad if you dont have the means to pay it when it is due. Avoid online shopping. Be wary of scammers online, otherwise you will end up paying an item for someone else.

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    4. In my country, we don't have such credit score records like that. What matters to the lender are just the current records like bills, documents, etc.

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    5. I was always told that credit score was important when buying a hosue but when it came down to it, they didn't even ask for it. But I think it's much more important at the moment, especially in the current climate.

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    6. Thank you for this! Having a good credit score is so important, when I first moved to Canada I couldn't believe just how important it was! Always good to be diligent and take care of it.

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    7. Thankyou for sharing this po. Napakalaking tulong po nitong tips na shinare nyo specially sa mga merong credit card .. Worth it to read po talaga and Worth it to share narin po .

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    8. Your credit card score is a huge factor in your future financial transactions. Improving your credit score will help a lot.

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    9. Having a good credit score determines whether you can buy a car or a house. Thanks for showing how we can improve our credit score

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    10. It's important to use your credit card wisely and responsibly these days.

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    11. Credit scores do make a difference The FICO score is the one most used in the United States. The key is to confirm the items that impact your score and keep doing what you can to improve.

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    12. Wonderful tips! Thank you for sharing. They're necessary.

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    13. Credit scores really do matter in other countries. In the Philippines, it's only for loan applications and credit card applications. Not so much on other things. Great tips!

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    14. I have been into financial education and yes. credit score rating is really important. I hope many would be able to share awareness to people on how to take care of their credit scores and be into financial freedom too. Indeed this is a good read.

      ReplyDelete

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