Maintain low credit utilization ratio
The credit utilization ratio is the total outstanding amount on all your credit cards divided by the total credit available on all your credit cards.
For example, if you have 3 cards with a limit of $3000 each, and you have utilized $700, $500, and $300 respectively on these cards, your credit utilization ratio is 16.67% (i.e., $1500/$9000).
People with stellar credit scores tend to have credit utilization ratios of less than 30%, and in general, this is what lenders like to see as well. A low credit utilization ratio implies you manage your credit well and are less likely to default on your dues. To fix your credit, aim to bring your credit utilization ratio to below 30%.
Dispute inconsistencies
You’d be surprised how often mistakes creep into credit reports. Or maybe it was a mistake on your lender’s part who reported your payment as late when in fact it was on time.
To fix your credit, you can always call up the lender and ask them to correct this mistake which is spoiling your credit. Dispute any inconsistencies that you notice so they don’t end up weighing your credit score down.
Make timely bill payments
Lenders like to look at a borrower’s utility and other bills because they are interested in learning how reliable you are when it comes to paying your bills. As a rule of thumb, lenders try to familiarize themselves with a borrower’s past performance because it is considered a fair indicator of how the borrower will perform in the future.
Paying your bills on time can help fix your credit. The bills include but are not limited to rent, credit card dues, loans, utility bills, etc. If you keep forgetting to pay these bills, set up automatic payments so the amount gets deducted from your bank account as and when the bills become due.
