[C]redit scores are an incredibly important factor in modern life. One’s credit score is a number that, at-a-glance, tells lenders how worthy you are of having credit extended to you. We all need credit in modern life, whether it is an auto or home loan, or just a credit card. However, it is easy in today’s economy to find yourself overextended and facing a ton of debt, all the while, watching your credit score go lower and lower. While your credit score cannot be fixed overnight, there are simple things you can do to get yourself on the right track to improving your credit, and fast.
No matter what you do, it will take time for your credit score to improve, just as it took time to find yourself in a world of debt. Many judgments on your credit report stay on your credit report for many years, even after the debt is paid off. This is why it is imperative that you be patient and continue to stay on the path to getting out of debt and fixing your credit score. Do not fall prey to scams, there are many out there who would like you to believe that they can eliminate your debts and fix your credit overnight, but this is not how it works. Remember, if it sounds too good to be true, it likely is.
The first thing you need to do to quickly improve your credit score is to obtain and really go over your credit report. It is not uncommon for people to get their credit report and find debts on there that they are not responsible for. If you find a debt that is not yours on your credit report, dispute it immediately and it will be removed from your credit report, likely instantly improving your credit score.
For all the debts that are yours, make a plan of action as to how you can best tackle them, starting with the debts that have been past due the longest or that garner the highest interest rates. You will need to create a reasonable budget that actually works within your means, you cannot have unreasonable expectations about what you can and cannot do. Your budget will be used to derive a repayment plan. Contact all your creditors, there is a good chance that you can work out a payment arrangement that works for your budget, and there is also a chance that you might be able to pay them off in a reduced lump sum, thereby eliminating that debt from your credit report as paid in full.
It is important that you stick with your plan, but also not be afraid of credit. It is important, especially if you have tons of credit cards, to close some of your accounts, but as tempted as you may be, do not close all of your accounts. Keep a couple of credit cards on hand and use them regularly for small purchases that can be paid off within the grace period. This will help improve your credit score, without your having to pay interest on an everyday household item.