Having a 320 credit score can be a major hindrance in your life. It can make it challenging to qualify for loans, credit cards, and even housing rentals. However, the good news is that it is possible to improve your credit score with the right steps. Since a 320 credit score is quite poor, in this blog post, we will discuss some of the steps you can take to improve your credit and get back on track financially.
1. Check Your Credit Report
The first step you need to take when trying to improve your credit score is to check your credit report. You can do this for free at AnnualCreditReport.com. Once you receive it, go through it to check for errors, such as inaccurate late payments or collections that don’t belong to you. These errors can cause your credit score to be lower than it needs to be. If you see any errors, dispute them with the credit bureau that provided the credit report.
2. Pay Your Bills on Time
Pay all your bills on time. Seriously, all of them.
One of the biggest factors that determine your credit score is your payment history. If you have a habit of paying your bills more than 30 days late, then your credit score will suffer. To improve your credit score, make sure to pay your bills on time. If you have trouble remembering to pay bills on time, set up automatic payments or payment reminders.
3. Pay off your Debts
A major factor impacting your credit score is the amount of credit you are utilizing. So if you have maxed out credit cards, or a car loan that isn’t paid off yet, your credit score will likely be detrimentally impacted. Paying off large amounts of debt may not be easy, but it will help your credit score. For most people, the best way to get more money to pay off your debts is to get a raise at your current job or get another, higher paying job. If you don’t have that much debt to pay off, there are an endless number of lists of side hustles or lists of ways to make extra money. You can find good ones here, here and here.
4. Reduce Your Credit Utilization
Another factor that affects your credit score is your credit utilization rate. This is the amount of credit you use compared to the amount of credit available to you. A high credit utilization rate suggests that you may be relying too much on credit, which can hurt your credit score. To improve your credit utilization rate, try to pay down your credit card balances.
5. Build Your Credit History
If you have a limited credit history, then it is difficult for lenders to determine your creditworthiness. To improve your credit score, you need to build a positive credit history. One way to do this is to get a secured credit card. Secured credit cards require a security deposit, and they are easier to obtain than traditional credit cards. Use your secured credit card responsibly by paying it off in full each month.
6. Seek Professional Help
Sometimes, improving your credit score can be psychologically overwhelming, and you may not know where to start. That’s why there are professional services, such as credit counseling and debt management programs, that can help you improve your credit score. These services can help guide you in paying off your debts and managing your finances. That said, you’ll have to be careful. There are a lot of companies out there which are basically looking to sell you debt consolidation services, so you’ll want to find a reputable company to work with. Check out the Consumer Finance Protection Bureaus’ page on this subject to get started, here.
Wrapping It Up – A 320 Credit Score Is Fixable
Improving a 320 credit score takes time and effort. However, if you follow these steps consistently, you can improve your credit score. Remember to check your credit report for errors, pay your bills on time, reduce your credit utilization, build your credit history, and seek professional help if needed. Before you know it, your credit score will be back on track, and you’ll be on your way to financial stability.
James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.