7 Proven Steps To Fix Bad Credit Mistakes
Many people struggle to fix bad credit these days, but you don’t have to stress out about credit mistakes when following our guide. There are ways to improve your credit score by resolving bad credit mistakes with simple and effective solutions you can try out today.
This guide from Cash Cow in Louisiana will explain seven methods for how to fix bad credit. We will also explain how you can get payday loans for bad credit when facing a financial emergency you cannot afford, such as medical expenses, overdue bills, and unexpected travel costs.
7 Ways To Fix Bad Credit Mistakes And Improve Your Credit Score
According to Experian, over 30 million Americans, or 13.2%, had a credit score below 580 in the third quarter of 2024. The reason for this is increasing inflation, which makes the cost of living more expensive by the day and makes essential costs like rent, mortgage payments, and credit card debt harder.
Those with bad credit usually pay higher interest rates, face being turned down for general financing, and have trouble successfully applying for everything from credit cards to apartments. Thankfully, there are options available to you to increase your credit score.
The following are seven simple tips for how to fix bad credit:
1. Pay Down Debt
The average consumer has about $5,300 in credit card debt. If you have multiple balances to cover, eliminating your debt should be one of the first things you consider to improve your credit score.
You can start by paying off the debt with the highest interest rates. Another option is to pay off the lowest balances first in full. You may also be able to consolidate your debt into one payment with one interest rate.
Prioritize lowering your expenses by cutting unnecessary costs and use the extra money to pay off debt affecting your credit score.
2. Pay Your Bills On Time
Arguably, the most important way to fix bad credit is to pay your bills on time, which is vital to improving your credit. 35% of your credit score is determined by payment history, so missing a payment can lead to a steep decline in your credit score.
Organize your bills each month and make a note of due dates. Setting up autopay will also take the guesswork out of timely bill payments. Remember, if a bill is 30 days past due, credit bureaus consider it late, and it can be reported to a credit bureau, impacting your creditworthiness. Even if you miss the exact due date, you can still recover from the mistake by paying it off a few days late.
3. Improve Your Credit Utilization Ratio
Financial advisers agree that a good way to fix bad credit is to stick to a credit utilization ratio that is below 30%. Credit utilization is determined by dividing the total debt owed by the total available credit.
The credit utilization ratio represents 30% of your FICO Score, so prioritizing ways to improve it is essential. Some ways to improve your credit utilization ratio include requesting credit line increases, using less credit every month, keeping your credit accounts open, and consolidating debt.
4. Leave Old Credit Accounts Open
When you have a below-average credit score, it seems like a way to fix bad credit is to get rid of some of your credit cards. Instead, leaving your old credit accounts open will go a long way to improving your credit history — and your credit score.
Credit accounts that are both open longer and have a good payment history tied to them will positively impact your credit score. Even if you have an account you haven’t used for years, consider leaving it open if you regularly pay the balances on time.
Any positive credit history you can maintain can help increase your score, even if you no longer have a use for the credit account.
5. Diversify Your Credit Mix
While having multiple credit cards may help your score, it’s also important to have a healthy mix of credit. Having a diverse mix — like a card, a mortgage, and a payday loan or car loan — can be a manageable way to fix bad credit.
One caveat: Refrain from opening several accounts within a short time. That action raises some red flags for credits who may view so many new accounts as very risky.
6. Limit Credit Inquiries
When pursuing bank loans for emergency cash or home and auto funding, they will likely do a hard credit inquiry to assess your financial situation. While this may be avoidable in some scenarios, you should try to limit hard credit inquiries as much as possible because it can lower your credit score.
Rather than shopping for the best rates at multiple banks and opening yourself up to numerous hard credit inquiries, do your research to determine just a few options you are considering.
7. Review Your Credit Report Thoroughly
It’s difficult to fix bad credit if you don’t know what’s on your credit report. Credit reports usually come from the three main credit bureaus: Equifax, Experian, and TransUnion. Those companies base their credit reports on what certain creditors, including credit card companies, tell them about a consumer’s bill payment history and more.
Federal law permits you to get a copy of a credit report for free each year from each of the reporting companies. Once you get your reports, review them carefully and make note of any inaccurate information, such as accounts that are not yours, wrong account balances, and late payments that were made on time.
Make an effort to report these inaccuracies to the credit bureaus to improve your credit score.
Consider A Payday Loan For Bad Credit
While you work toward improving your credit score, a financial emergency can arise that you cannot afford. If you need financial help but fear your credit isn’t good enough, Cash Cow in Louisiana can help with our payday loans for bad credit.
Louisiana payday loans allow borrowers to receive up to $300 after proving their income. Think of it as borrowing money from a future paycheck to handle an urgent cost that cannot wait. You can borrow the money fast, pay your financial emergency, and repay the Louisiana payday loan with your next paycheck.
If you’re looking for a fast, convenient approval process for payday loans, Cash Cow in Louisiana can help. We have simple eligibility requirements and can guide you through the process directly. You can get same-day approval for payday loans and receive your emergency funds within one business day.
FAQs
Why can you get payday loans for bad credit?
Payday loans are short-term, low-value emergency loans, so you don’t have to prove your creditworthiness. You can borrow money as long as you can prove you have consistent income.
What are the requirements for Louisiana payday loans?
At Cash Cow in Louisiana, we only require borrowers to have three items for payday loan eligibility: a driver’s license or state-issued photo ID, your most recent pay stub, and a blank check from an active checking account in your name.
How does payday loan repayment work?
Most borrowers repay their payday loan with their next paycheck. This allows you to resolve your debt quickly to avoid it from snowballing due to interest and causing a further financial crisis. Only borrow a payday loan if you feel you can repay it with your next paycheck.
Borrow Louisiana Payday Loans For Bad Credit – Receive Up To $300 Today!
Bad credit mistakes can be rectified by following our tips above. In the meantime, you can benefit from our easy approval payday loans when faced with a financial emergency. You can apply online with our simple loan form and get approved in person in less than 30 minutes at one of our Louisiana store locations.
Ready to borrow emergency cash today? Fill out our online form or call us to discuss the payday loan process.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.