Bad credit situation is something that the majority of people go through. Almost 16.2% had bad credit in 2018. This happens due to a low credit score. Low scores are awarded to the credit holders who have a history of late repayment of loans and bills. Lower credit score creates a negative image in front of the potential lenders which ultimately results in you facing trouble to get the perfect loan.

But it is always better to obtain a credit report for proper verification. You need to learn the shortcomings. Understanding the problems that lead to a lower credit score can help you in finding the right solutions. You may easily get credit reports free of cost.

Once you have figured out the problems in your credit report, you should try your best to improve the bad credit. Here are the 6 ways you can use to improve your credit score.

• Find mistakes in credit reports and correct them
  Obtain reports from more than one place. Compare them to find out any mistake. If there is, you need to call the Credit card report firms and ask them to rectify the mistakes. This will improve the credit score.
• Timely bill-payment
  Paying your bills on time helps in boosting the credit score. When lenders get hands on your credit history they are eager to learn more about your bill payment functions: How frequently you pay bills? Do you pay bills on time or not? If they are satisfied with the report they are willing to lend quickly. You need to focus on all kinds of bills like a student loan, home loan, electric bill and more. Set a reminder in your smart-phone devices so that you don’t be late in processing your payments.
• Go for new credit cards only when needed
  Many people assume that having too many credit cards on their name improves the credit score. However, it is not so. Credit mix doesn’t add much to the credit score rather if it backfires it may result in lower credit score. Also, having too many credit cards will lead to several inquiries and this has a negative impact on the score.
• Keep using old credit cards
  If you keep your old credit cards active by periodically using them then it will help in boosting the credit score. Credit scoring firms prefer people who have stayed on a single credit for a long time. But remember to keep the credit card utilization rate low.
• Build rainy-day funds
  Having an emergency back-up can help you in times when there are debt obligations. This will be good for your credit scores.
• Avoid overspending
  Credit users with high balances are always in for trouble. Credit card reporting firms penalize the cardholders who have high balances that are, the money you owe on your credit card. It is better to keep the credit card balances at around 30% of the available credit. The best way to do this is to pay down your credit debts.