How To Fix My Credit By Myself?

follow these steps here
follow these steps here

To fix your credit by yourself, follow these steps here. 

  1. Get your report by calling Equifax at 1-800-465-7166 and asking them for a free account and report.
  2. Find out what is what and what needs your immediate attention.

You need to focus on 8 things when fixing your credit.

  1. Number of accounts
  2. Used vs. Available Credit (Utilization rate)
  3. Type of Credit/ Credit Mix (Credit Card, Mortgage, Line of Credit)
  4. Credit History – How long have you used credit?
  5. Hard Inquiries – when a financial institution or lender credits your credit report
  6. Amount Owed
  7. Payment History (Do you pay on time? Minimum payment? How late?)
  8. New Credit

These things you can find them on your credit report after you get the report from Equifax. Displayed real-life examples of how you can go about fixing and removing an account that has reached the collection stage. Next, you need to understand what makes your credit score is.

 A rough breakdown of what makes your credit score – Plus fix.

Tips & Tricks

Utilization Rate: Don’t use more than 25% of your Credit Limit. E.g., if your credit limit is $10,000 a month, don’t use more than $2,500 a month. The average utilization rate is 30%, so if we cut the utilization rate in half, it will increase your credit score quicker. This is important because the more credit you use, the more it looks like you are dependent on the credit card, which looks terrible to credit bureaus.

Raise Credit Limit: If the credit limit on your credit card is $5000, and you spend $2000, your utilization rate (2000/5000) is 40%, which is terrible. However, if you raise your credit limit to $10,000 and spend $2000, your utilization rate (2000/10,000) is 20%, which is very good.

Payments: Make a payment toward your credit card bill every week. Some credit card companies report the statement balance of their customers to credit bureaus within a couple of days of payment, or it could be a specific day in the month, etc. It depends. Therefore, keeping the amount owed/ the balance low will keep your utilization rate low, which helps your credit limit.

1. Summary of Credit Report

NOTE – BELOW IS A REAL-LIFE EXAMPLE AS IF I WAS HELPING YOUSTEP-BY-STEP TO IMPROVE YOUR CREDIT – READ CAREFULLY.

Money Owed:

Yellow: What you own and what it could be saying about your situation to the creditors.

BAD CREDIT REPORT REAL-LIFE EXAMPLE – STEP-BY-STEP – HOW I WOULD HELP YOU FIX YOUR CREDIT AFTER YOU GET YOUR REPORT.

Report – Bad activity – Money Owed:

Company Amount Owed Status
CIBC -$110 Monthly Payments
CASHMAX -$769 In collections
CSF Asset Management -$890 In collections

Positive:

1. There is room for significant improvement

2. There have been no hard credit inquiries in this fiscal year –That is when you are asking for new credit or loans – let’s say you didn’t do that for that past year. That is good NEWS.

2. What is hurting your credit score?

  1. No credit card
  2. Late payment history
  3. Collections
  4. Length of credit history

Areas for Improvement:

About this pie chart, we need to work on

Length of Credit History – Length of Credit History (15%)

  1. Amount Owed – (30%)
  2. Payment History – (35%)

What to check on your credit report

 

3. The quickest way to improve credit

Step 1

Improving Amounts Owed – 30%

  1. CIBC
    1. This debt is brand new, and the Best Way to improve your credit score is to pay off this debt. Although the amount is only $100, it shows companies who view your credit report that you cannot make a $100 payment. Therefore, why would they trust you with thousands of dollars if you cannot pay off 100$? So you will need to pay this off.
  2. CASHMAX
    1. This debt has already been sold to a debt collector called RFR Inc. Therefore, the Best Way to approach this debt is to pay it off. However, you do not need to pay off the whole thing in most cases. Debt collectors are open to a payment plan/receiving a lower payment because they purchased your debt at a discount. Therefore, you need to pay between 20%-60% of the total debt amount, which is $769. Consequently, you only need to pay around $154-$462. However, it is entirely up to them to decide the amount.
  3. CSF Asset Management
    1. This debt has already been sold to a debt collector called DEBT CONTROL AGENCY. I called this company, and they are open to a payment plan/lowered amount, but they wanted to talk to you and learn about your situation. The best way to approach this debt is to pay it. Again, I believe that you will only need to pay around 20%-60% of the $890 owed, which is $178-$534, but it is up to them to decide the amount. 

Having these debts going from unpaid to paid is very important because companies who view your credit report do not want to have their capital invested in someone who they believe will not repay them. Therefore, once you improve your credit report and credit score by showing companies you can repay debt, your credit score will increase. Therefore, paying off these debts is the most crucial step to improving your credit score.

Step 2

4. Length of History (15%)

  1. To improve your credit score, you need to have some credit. Right now, you do not have any credit cards. Therefore, you are not building your credit at all. The best way to improve your credit is with a credit card, also called revolving credit. Revolving credit is significant because it shows companies that you can continue to pay off your debts often. I have a list of credit cards that I believe would be beneficial to you.
  2. Capital One Low Rate Guaranteed Mastercard
  3. Capital one Costco Card
  4. Total VISA Card
  5. INDIGO Mastercard for less than perfect credit
  6. Capital One Low Rate Guaranteed Mastercard
  7. Canadian tire triangle Mastercard
  8. PC Financial credit card
  9. American Express SimplyCash

Step 3

5. Improving Payment History – 35%

  1. Once you choose a credit card, this is where you start to improve your payment history. You need to make all payments ON TIME.If the payment is $1, pay the $1 on the required date. In fact, pay portions of your credit card every week, so it shows that you are not using too much of your credit. Payment History is the easiest to improve, but it will take time. You must continuously pay on time to improve this portion of the pie – 35%. In addition, if all your money is paid on time, you won’t owe money. If you owe money, this will hinder your Amounts Owedwhich make up 30% of your credit score. Therefore, if you pay all your payments on time, then you don’t have to worry about the 30% of your credit score.

6. The cheapest way to improve Credit

1) Get Credit Card

Choose a couple of the following credit cards. Just a warning, because your credit is not good, you may not be able to get a sound credit card. You may need to get a secured credit card. However, the credit cards in bold below are the credit cards I suggest you try and get first.

  1. Capital One Low Rate Guaranteed Mastercard
  2. Capital one Costco Card
  3. Total VISA Card
  4. INDIGO Mastercard for less than perfect credit
  5. Capital One Low Rate Guaranteed Mastercard
  6. Canadian tire triangle MasterCard
  7. PC Financial credit card
  8. American Express SimplyCash

If these credit cards don’t work, try getting one of these:

  1. Home Trust Secured Visa Card
  2. Capital One Guaranteed Approval Secured Mastercard

2) Follow the instructions below on how to use your credit card:

Utilization Rate: Don’t use more than 25% of your Credit Limit. E.g., if your credit limit is $10,000 a month, don’t use more than $2,500 a month. The average utilization rate is 30%, so cutting the utilization rate in 3/1 will increase your credit score quicker. This is important because the more credit you use, the more it looks like you are dependent on the credit card, which looks terrible to credit bureaus.

Payments: Make a payment toward your credit card bill every week. Some credit card companies report the statement balance of their customers to credit bureaus within a couple of days of payment, or it could be a specific day in the month, etc. It depends. Therefore, keeping the amount owed/ the balance low will keep your utilization rate low, which helps your credit limit.

2) Wait for CashMax and CSF Asset Management to be removed from your credit report. It can take 2-6 years for these to be removed from your credit report, but if you do not want to pay, you will just have to wait for it to FALL OFF.

3) I would suggest you pay off the $110 you owe to CIBC. A debt of 110$ does not look good because it is a small amount and shows that you can’t pay it. So I suggest that you save 110$ and pay it off.

This is for Those of you who are NEW TO CREDIT, NEVER HAD CREDIT BEFORE – NEW TO THE COUNTRY, MAYBE

8. Get a credit card.

Step 1

Improving Credit Mix (10%), Length of History (15%), and New Credit (10%)

  1. Regarding Credit Mix, you need a Credit Card. You need a credit card to start building your credit. Below I have mentioned which cards I believe are the right fit for you if YOU ARE NEW TO CREDIT AND HOW NO CREDIT HISTORY.
  2. New Credit and Length of History
    1. You need to get a credit card to start building your credit. Once you get a credit card and start paying your bills on time, your credit score will increase because you will are increasing the length of your credit history – which impacts the 15% of what makes your credit score (Refer to the pie chart)
  3. Please review these Credit Cards and get 1 or 2 (depending on how much money you spend per month). Secured cards require a deposit. Therefore, you need to put money down to get that credit card. 
    1. Home Trust Secured Visa Card
    2. Capital One Guaranteed Approval Secured Mastercard
    3. Capital One Low Rate Guaranteed Mastercard
    4. Tangerine money-back card
    5. Refresh Financial Secured Visa
    6. Capital one Costco Card
    7. Total VISA Card
    8. INDIGO Mastercard for less than perfect credit

Refer to TO THE CREDIT CARD SECTION on how to properly use your credit card to help build your credit score.

 Would like to make more money using credit and forex visit this.