How to Fix Bad Credit in Three Steps

Nearly one in three Americans have a credit score that is below the ‘good’ rating. Most of those people know it, and others have no idea. If you know you have a less than ideal credit score, you’ve already taken the first step toward improvement. It’s understanding the need to fix bad credit. Bad credit is a difficult thing to live with. It can prevent you from getting a credit card to make purchases you want and need. With bad credit, you might not be able to buy a house or rent an apartment. You might be stuck hitching a ride with friends or taking the bus instead of showing up in your own car. The good news: if you have bad credit, it’s not the end. You can get through it. With diligent attention, you can fix bad credit and work towards financial freedom.

How to Fix Bad Credit

There are just three steps toward fixing bad credit. Each step is broad and has different meaning for everyone. However, if you can get in control of these three things, you’ll be on your way to a good credit score.

Manage Debt

Bad credit often starts with missed payments, over-extended credit cards, and defaults on loans. If you can’t prove to lenders that you can be responsible with money you borrow, you won’t be able to fix bad credit. Buckle down on your debts. Pay down loans and get current with your credit card payments. Don’t borrow anything new until you have control of your current obligations.  

Spend Wisely

Because many people with bad credit haven’t learned money management skills, this can be the most difficult step. Making informed, deliberate purchasing decisions is a fundamental principle in repairing credit. Put away your credit cards for now. Pay your obligations first, then spend only as much as remains afterward.

Borrow Money

Once you have managed your debt and brought spending under control, you’re ready to borrow again. Take out a loan with manageable payments. The loan terms will likely come with high interest rates until your credit rating begins climbing. A used car loan is often a great way to begin to fix bad credit, but only once you’ve tackled the other steps.   If you need wheels but have bad credit, we can help. CarUp KC specializes in credit situations that aren’t perfect. We can help you begin to fix bad credit while getting you into the car you need.

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