As a young adult, credit becomes crazy important.
You need it to help you with your first big grown-up purchases like a car, home, appliances, or education. A line of credit also allows you to buy everyday things you need like groceries and toiletries when your bank account drains between paydays. Having this small amount of temporary debt actually improves your credit rating, as long as you pay it back in a timely fashion. But a lot of us get bogged down with bills until our credit becomes crazy low.
This post is sponsored by Lexington Law. All opinions are 100% my own!
Luckily, you don't have to get stuck with your bad credit score forever! This quick and painless method improves your credit to help you get approved for loans and credit cards in the future. In this post, I'll help you understand everything you need to know about your credit score and how Lexington Law's credit repair services can help you out fast!
What Is A Credit Score, Anyway?
So first thing's first. Before we can talk about fixing your credit, we need to establish what a credit score is in the first place. This number comes from a history of your entire financial history. It's sort of like your permanent record in school.
Because it doesn't focus on just your recent transactions, it can be hard to fix credit quickly, but more on that later. Many different things go into calculating your credit score. The factor that affects your rating the most is your payment history, i.e. how good you are about paying your bills on time. The amount of debt you currently have is also pretty important.
Just like at a job, the amount of “experience” you have with financial transactions (determined by how long your financial history is) also factors into your credit rating. Lenders also look at how much new credit you are using, from opening new bank accounts to signing up for credit cards.
Finally, the type of credit you have affects your credit rating. Scores will be different for people with credit card debt versus a mortgage or student loans. If all of that sounded confusing and you want to leave, hear me out. Credit ratings are nothing more than a financial report card, but one that you can change over time.
How Do I Know If I Have Bad Credit?
The short answer is that if your credit rating is below 560, you have bad credit. But what does that even mean? Often people who have low credit scores simply have some financial habits that are considered undesirable to lenders. For instance, not paying your bills on time kills your rating because institutions want to get their money back in a timely manner. Even if you always pay on time, though, holding outstanding debt lowers your score.
Lenders fear you won't be able to pay them back if you already owe a lot to someone else. While it's okay to open a new credit card or account now and then, avoid starting lots of new forms of credit all at once. This can make you look desperate for fast money which turns lenders off.
Having a longer financial history improves your score because it shows you know how the game works and won't get confused when it comes time to pay back your debts. Though it doesn't hold a ton of weight in your credit score, the kind of credit you use plays a part.
Consistent forms of credit like car payments and student loans make you seem more stable than credit card debt that goes up and down each month. Lenders definitely prefer to give their money to people who seem stable and responsible.
Why Does Your Credit Rating Even Matter?
Here's the thing.
Your credit score matters a lot more than you might think. The main purpose of a credit rating is to show lenders how much of a risk you are. That means if you need a mortgage to buy a house, a loan to buy a car, or even want to open a new credit card, the lender will make their decision based on your credit score.
If you have bad credit, they are more likely to charge you crazy interest rates to ensure they don't lose money. They also might simply not approve your request at all. Bummer!
But that's not all!
Credit ratings don't just affect your financial transactions. Lots of other people in your life judge you by your credit score and you might not even know it. For instance, landlords often choose a tenant with a good credit score so they know they'll get paid on time.
Insurance companies may view a low credit score as being a reckless person in general, leading to higher insurance premiums. Bad credit can even negatively affect your job search! Some employers see a low credit score as a reflection of your inability to be responsible and hard-working.
Bye-Bye Bad Credit Score!
Thankfully, credit scores are constantly changing. With every financial transaction you do, your rating changes slightly. The faster and more consistently you make payments on your current debt, the better your score will be. But what if you need a faster credit fix?
For those who are looking to take out a loan or open a new credit card, you need to improve your credit quickly. You can raise your credit rating almost instantly by engaging in credit disputes. This means that you feel parts of your financial history don't accurately reflect your credit risk to lenders.
You can launch an investigation into certain items that affect your credit score and even get them permanently removed. This boosts your credit rating so it's truer to your real credit habits. That's where a credit repair service comes in.
Lexington Law Can Fix Your Credit Fast
One awesome example of a credit repair company is Lexington Law. With attorneys admitted to states all over the country, Lexington Law is one of the top credit repair companies that can help you start your journey to credit improvement.
They've helped get literally millions of unfair and inaccurate transactions from late payments to bankruptcies removed from people's financial histories, which, if everything else stays the same, can boost their credit score.
The best part?
Lexington Law isn't some fly-by-night operation that promises credit fixes that are too good to be true. They use real lawyers and legitimate, legal methods to challenge and dispute negative financial transactions on your history.
They know that you have the right to question any item on your credit history to verify that your report is fair, accurate, and substantiated. The legal team also knows that if it can't be verified by the creditor, it legally has to be removed.
Working through the credit repair process on your own is time-consuming and confusing.. Instead, Lexington Law does the hard work for you so you can get on with your financial future!
Get Started Now!
Whether you are in tons of debt or just looking to take out a loan, you may find yourself thinking “How to fix my credit?” Turns out it's a lot easier than you might think to engage Lexington Law and get started.
With Lexington Law's credit repair services, you'll see them working on your behalf as soon as possible. They can help you get rid of transactions that don't reflect your financial reality so your credit rating shows the real you!