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Nothing feels worse than having a lot of debt. That is, until you apply for a loan to get a new house or start a business, and your application is rejected because of your bad credit score. It can feel like your debt is holding you back from reaching your life goals. It doesn’t have to be this way. While improving your credit score won’t be easy, there are steps you can take to slowly improve your rating.

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Clear as much debt as you can

Paying back some of your outstanding loans and credit card bills will go a long way to improving your score, and it will also help you save money for the things you find more important. This first thing you need to do is get a copy of your credit report so you know exactly where you stand. Once you’re familiar with your situation, you can begin to make a realistic repayment plan and eventually free yourself from the grip of debt. From here, you can get in touch with the best credit card repair companies to help you build up a good credit history.

Leave old debt on your report

Clearing your debt from your accounts doesn’t mean you should clear it from the credit report. Debt that you’ve managed to deal with and clear off is evidence of a good credit history, and it shows that you can be trusted to follow through with repayments. You don’t want this to come off your history.

Apply for credit you’re likely to get

Although an improved credit score will give you more loan options in the future, you shouldn’t go crazy and apply for multiple loans with high repayments. There are smarter ways to build up good credit.

Apply for a credit card with high interest, but only use it to spend small amounts. By doing this, you can show lenders you’re a responsible borrower by clearing the balance every month and not being charged interest. You need to do this for about six months.

Pay your bills on time

Your improved credit score will leave you options for buying a house, getting a new car, or borrowing money for big expenses, like a wedding. Whatever repayment plan you’re given, you must make sure you pay your bills on time. Even if you’re sitting on a pile of savings, a drop in your score could suddenly set you back all over again.

Don’t obsess

While it makes sense to want to keep your score at a good level, you don’t actually need to worry about it until you know you’re going to need credit. In between the big purchases, just pay your bills on time and use your credit responsibly.

That said, you should try to check your score on a regular basis so there are no unpleasant surprises. Make sure you always keep your information up to date, as this could save you many headaches later.

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