If your credit score is in need of a serious overhaul, there are a few steps you can take yourself to improve your score. Unfortunately, poor credit is usually the result of poor spending habits, and it takes money to pay off debts that drag your credit down. But if you’re already making the minimum payments on your balances and don’t have anything leftover, how can you repair your credit without more money?
Here are some steps you can take to improve your credit that doesn’t require more money:
Check your credit report
The first thing many people should do, but don’t, is to check their credit reports. Don’t settle for the score you’re told, because a lot of times there is incorrect information that is bringing your score down. You are entitled to one free copy of your credit report each year, so get a copy from each of the three credit bureaus and learn how to read it thoroughly and accurately. Take note of any information that seems incorrect or out of place. Also take note of anything from the past that could be negatively affecting your score. You can sometimes write a letter of goodwill or make arrangements to have it removed by the reporting agency in exchange for a payment.
Dispute incorrect data
If you do find incorrect information on your credit report, it doesn’t cost anything to dispute it and have it removed. And the good part is, you only have to dispute it with one of the credit bureaus and they will report the change to the other two. You may need to provide some evidence of payments or prove that the information is incorrect, but often the company or agency which reported the information will work with you to rectify the problem.
Your credit score is a largely a reflection of your ability to make your payments on time, so simply being proactive about paying your bills can improve your credit score without costing you a dime. Set reminders on your phone or set up automatic billing with your monthly bills to make sure you don’t accidentally forget a bill. Many times utility companies, credit card companies, internet companies, etc. will give you a discount for setting up automatic payments because they simply want to get paid.
If you need to pay down debt fast but don’t have any other sources of income, you may need to downsize your current living situation to free up some money. See if you can find a smaller or less expensive apartment if you rent, or sell your car and pay cash for a more affordable ride, using the rest to pay down debt. While it may seem drastic and like a sacrifice, in the long run, you’ll have more freedom with better credit.
If downsizing is also not an option, simply cutting back on some of your regular expenditures can add up. Take the time to pack lunches instead of eating out, walk or bike to work instead of driving to save on gas, and find free or cheap sources of entertainment for a while. The few extra bucks from each area of savings will add up to hundreds quickly, and help you pay down debt and improve your credit score.