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5 Ways to Rebuild Your Credit and Get a Lower Interest Rate

Bad credit loans urban bcl: When you’re trying to get a mortgage or car loan, lenders will often check your credit. If your score isn’t high enough, they may not be willing to give you the financing you need at a reasonable rate. But many people struggle with their credit at some point in their lives, whether due to financial hardship or other situations that can make it harder for you to keep track of your credit. Fortunately, there are ways to improve your credit and get a lower interest rate when buying a home or a car. Here are 5 tips on how you can rebuild your credit and get a lower interest rate when buying a new home or car soon.

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5 Ways to Rebuild Your Credit and Get a Lower Interest Rate

Bad credit loans urban bcl: BusinessHAB.com

Rebuilt credit is different from a new credit score.

A new score usually means you have fewer negative accounts and your existing ones are newer.

Rebuilding your credit after it has been damaged can take time, but there are ways to speed the process up.

If you want to take out a loan for a car or home, get a credit card, or even rent an apartment, you’ll need good credit to do it.

Having bad credit can result in paying a lot more for anything that requires you to prove your ability to pay back a loan.

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Fortunately, there are several ways to rebuild your credit and get a lower interest rate on future loans.

Keep reading to discover five ways to rebuild your credit and get a lower interest rate on future loans.

So that you can buy the things you want and services you need without breaking the bank.

Check Your Report and Repair Mistakes

If you’ve been struggling with bad credit for a while, there’s a chance you might have some incorrect information on your report.

Credit bureaus are required to investigate any complaints about incorrect information but it may take them a significant amount of time to do so.

There are two primary ways to view your credit report.

You can either request your report from each of the three credit bureaus or you can use a credit monitoring service.

Credit bureaus will send you a free report every 12 months, but keep in mind that the report you are sent is probably not the most accurate.

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If you want to make sure your report is correct, you’ll have to purchase a credit report from each of the three credit bureaus.

Each bureau will charge you $19.95 but it’s worth it because a mistake on your report could be costing you a lot more.

If you find any mistakes on your report, you should definitely reach out to the credit bureau and file an investigation.

If the bureau can’t get the mistake corrected, you’ll have to dispute the information with the credit bureau and the original creditors.

If a mistake has cost you a lower credit score, it could be costing you a lot of extra money.

Pay Off Instalment Loans and Cards

Credit card instalment loans and other revolving accounts are often the first thing to go when you’re struggling with credit.

Credit card interest rates often hover between 13 and 30 per cent, so paying off a $1,000 balance could cost you $1,300 or more in interest.

Holding a credit card balance is a great way to continue to damage your credit score.

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If you can’t pay off the balance, you’ll keep getting hit with high interest rates.

Paying off high-interest instalment loans can be equally as damaging.

If you can make a lump-sum payment and pay off the entire instalment loan, you’ll help your credit score.

If you can’t pay off the full amount of the loan, make sure you pay at least the minimum payment on time and stay on top of those payments.

Utilize a Paid Service to Help You Repair

If you’ve been struggling with bad credit for a long time, you might be tempted to pay for help.

There are many companies offering to help you repair your credit with a one-time fee.

If you’re considering paying for credit repair help, keep in mind that there is no quick fix and one-time fee is not the right approach.

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The best way to rebuild your credit is to work at it.

A credit repair service will help you remove incorrect information from your report and negotiate with creditors to get bad accounts removed from your report.

It’s a long and sometimes tedious process, but it’s the only way to rebuild your credit.

Add New Accounts With Care

If you’ve had bad credit for a significant amount of time, you may not be able to open a new credit account right away.

A new account on your credit report means you’re adding another positive item to your credit score.

If you have trouble getting credit and want to speed the process up, you could consider co-signing with a friend or family member.

If you co-sign a loan, you are 100 percent responsible for repayment.

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A co-signed loan will be reported to the credit bureaus as if it was your loan, which will help you rebuild your credit.

When you’re ready to open a new credit account, try to be selective.

Opening too many new accounts at once could lower your credit score.

If you have bad credit, it’s best to only open one or two new accounts at a time.

Conclusion

Rebuilding your credit can be challenging, but it’s not impossible.

If you’ve had bad credit for a while, the best way to rebuild is to pay off old accounts and keep new ones open.

If you’ve been struggling with bad credit and want to buy a car or home, get a credit card.

Or maybe even rent an apartment, you’ll need to rebuild your credit.

Fortunately, there are several ways to rebuild your credit and get a lower interest rate on future loans.

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