Life is less forgiving in your mid-40s or 60s. At this age, you have tried your hand at various things in life, and you either succeeded or failed. Be it divorce, bankruptcy or financial mistakes that result in a bad credit score, you have to pick up the bill and get back on your feet. With a bad credit score, usually below 619 on the FICO score, many doors will be closed for you. That means no access to loans, higher insurance premiums and sometimes unemployment because some employers take credit reports seriously.
All hope is not lost. You can still rebuild your credit or improve your score with the following easy steps.
1. Check your Credit Report
This will let you know your financial position. It will help you establish what you need to work on, whether it's late payments or high debt utilization. Plus, you never know, it could be filled with errors and fraudulent accounts.
2. Plan to Catch Up on Payments and Pay Up On Time
Being behind your payments is not good for your credit status. Work out a payment plan with your creditors to help update your accounts. Resolve to pay all your bills on time going forward. You don't want reports of missing payments or late payment on your credit status. A reliable payment pattern is essential for rebuilding your credit.
3. Don't Close Your Credit Card Account Yet
The longer your credit history, the better so, try not to close your credit card account. But, if you haven't paid in a while, you might be forced to close it with some payment plans.
4. Pay Your Debts
This is one of the most critical factors in your credit score. Try to maintain your credit utilization at 30% or less. Credit utilization is a fraction of the available credit you are using. It is better to plan on paying your debt faster. Checking your expenses and using the money you save up can help you reduce the debt.
5. Adopt Good Financial Habits
Try to adopt good financial habits like living within your means, saving, and having an emergency fund. These habits will help you rebuild your credit and maintain it in the future.
Rebuilding your credit should not be complicated if you have a solid plan and patience. With the steps above, you will be on your way to achieving an excellent credit score.