How to Fix a Bad Credit Score for 2020

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Here’s the Video Transcript:

hey what’s up guys this is Mario in today’s video I’m gonna talk about how to fix a bad credit score and what steps you should take to fix your credit score as soon as possible look guys we all go through rough times in our life and when things get tough financially our credit scores do end up taking a hit this could happen for many reasons it could because we lost our job we got hurt at work and now we are not able to work anymore because of medical issues a loss of income regardless can have many many repercussions and that could include of course affecting your credit score so the question is what can we do if our credit score has been already been damaged well guys in today’s video I’m gonna cover what steps you should take if you already have a bad credit score that has been impacted by late payments accounts in collections and even maxed out lines of credit now guys all I ask is you smash the like button subscribe to this channel thank you very much guys all right guys let’s get started federal law allows you to request a free credit report every single 12 months from each credit report agency that means you can get a free credit report from Experian a free credit report from the TransUnion and a free credit report from Equifax federal law also allows you to ensure that your credit report is correct and up to date so if you see any discrepancies in your credit report from any of the agencies make sure you file a dispute now when you file the dispute the credit agencies have to validate the stuff they put in your credit report so if they cannot prove that the stuff on your credit report is correct they have to remove it by law from your credit report within 30 days so absolutely take advantage of that guys alright guys so the question becomes where can I get a free credit report from each credit agency good question guys you could actually get a free credit report from each credit agency at annualcreditreport.com there you’ll be able to get a free credit report from Equifax a free credit report from TransUnion and a free credit report from Experian annual credit report will only give you all information on your credit report that deals with like late payments collections all the accounts credit lines and credit you have open but they will not give you a credit score number so to get a credit score number I recommend you to go to creditkarma.com and then there they will show you a credit score number to see what number you’re at the only difference between Credit Karma and on your credit report is that annual credit report will give you a free credit report from all three agencies versus Credit Karma will only give it from one and they will charge up for the others so my recommendation is a get all your credit reports from from annual credit report first and then go to Credit Karma to kind of see a score of what your credit score is okay guys all right guys it’s late payments now as we all know thirty five percent of a credit score is based on payment history when you don’t pay your bills your debt for thirty days or more it will report on your credit report avoid even having a late payment be reported on your credit report so if you are a couple days late on your debt hey make that payment as soon as possible because you have 30 days before they report on your on your credit report and also a late payment stays in your credit report for seven years and that’s a huge component of your credit score so if you already have late payments make sure that of course you look at it to see if they are 30 days late 60 days late or 90 days late avoid having your late payment or your debt go to collections late payments and accounts in collections stay on your credit report for seven years so avoid at all costs for your debt to go to collections and make sure you pay that late payment as soon as possible now if you’re having trouble paying payments because of financial issues call up the credit card or the car loan whoever let you borrow the money the bank etc and try to develop a payment plan to get back on having current payments and something that’s more flexible that is based on your current income and your situation and let them know hey I’m having trouble making these payments please help me out let’s make let’s set up a payment plan that is feasible for me that I could afford make these payments very very important before you make a late payment or even once you have a late payment to call them up and try to figure a new payment plan that works better for you so if you already have a late payment on your credit report make sure you pay that payment but call your financial company whoever let you borrow the money and ask politely hey you know I want to make this payment but can you please remove that late payment on my credit report now as a reminder guys financial companies do not have to remove these late payments from your credit report it’s a courtesy they don’t have to it’s not an obligation but if you are very very nice with them you’re polite and ask them you know can you please help me out here I’m gonna make my payments please remove this late payment on my credit report I don’t want it to affect my credit some of them will be very nice to do that for you okay guys but very very important be very very nice and polite because again this is a courtesy they’re doing for you they don’t have to do it and make sure you pay that and also follow up on that after 30 days to see if it’s actually been updated on your credit report okay guys so let’s talk about collections now collections can happen in many many ways you know you can have medical bills in collections you can have utility bills in collections you can even have unpaid parking tickets in collections guys so you will be surprised you know of what you will see in your credit report that’s the reason why it’s so important to look at your credit report to see what’s really affecting you because it may be that unpaid parking ticket that you you forgot to pay five years ago somehow is affecting your credit score and you had no idea guys so an account goes into collections when you haven’t made a payment at all usually 180 days but it depends on the debt if it’s a car loan that may happen actually within sixty days actually your car could get repossessed within sixty days but if it’s a credit card it may take up to 180 days before your debt goes to collections but it really depends on the type of debt so make sure you understand that okay but once your account is in collections that means you haven’t made your payment for a very long time it could be sixty days it could be 90 days it could be 180 days the goal of course is to make sure none of your debt goes into collections but if it’s already there hey there are things you could do number one if your your debt goes into collections try to negotiate the debt you know try to negotiate something with the collection agencies so you could pay less on your debt so pretty much what happens is when you don’t pay your debt for a very long time credit card companies will end up selling your debt for pennies on the dollar to these third-party collection agencies and these collection agencies are the people actually start calling you every single day knocking on your door hey you gotta make this payment so what you could do is try to negotiate with them to lower your debt once you’ve actually made a payment or you payed off your collections also try to negotiate hey can you please remove this collections from my credit report now as a reminder guys these companies are not obligated to remove collections on your credit report it’s all based on courtesy so very very important to make to be very very polite with them be very nice because again they’re not obligated to do this but as part of the negotiation procedures try to have them also remove your collections on your credit report the other thing is very very important if you have old collections you know things that happen more than seven years ago this should be removed from your credit report so if you have old late payments old accounts in collections that are actually older than seven years they have to be removed because late payments only stay in your account for seven years on your credit report for seven years and accounts in collections should only be staying in your credit report for seven years make sure you get in contact with that credit agency and have them removed because they’re not supposed to be there after seven years all right guys okay so now let’s talk about maxed out lines of credit so there could be a lot of reasons why you have a card maxed out I mean it could be financial issues medical issues you’re not able to work or of course it could also be you know or not understanding how to you know keep a budget so there’s a lot of things that could cause for you to maxed out your lines of credit but the simple solution to fix that of course is to pay down your all your debt if you have a savings account where you have money saved up that is making less than 1% and your credit cards are charging you like 10% 20% again it makes no sense guys use that money in your savings and pay off your debt because not only will you increase your credit score and get to make it better but you’ll also save a lot of money on interest okay to help out with maxed out credit lines the other thing you could do actually well if you don’t have the money to pay off some of that debt you know of maxed out credit cards next thing you could do is apply for new lines of credit so applying for new lines of credit will increase your credit limit so for example if you have a $5,000 credit card and it’s pretty much maxed out so you have like for example let’s say $4,000 in debt and that $5,000 credit line see if you could apply and qualify for another credit card that might actually give you another 5 grand so now you have one credit with a $5,000 credit limit and then now you have another second credit card where another $5,000 credit limit so you have like a $10,000 credit availability but you only owe four thousand and one of them so if you think about it that’s a 40% credit utilization versus when you first only had one credit card with $5,000 credit limit and you had a like a 90% credit utilization so that’s what could help you with your you know your credit utilization score so that could help with your bad credit score there could be many reasons why your credit cards maxed out now if it’s from medical reasons emergencies is totally understandable but if it’s for other issues like you have spending problems which it does happen guys hey we all make mistakes we’re all young we all like to overspend on things traveling or buying gifts for family or friends or just going out I mean it happens its happened to me I’m sure it’s happened to you as well and that’s okay but if you are having trouble managing your expenses and you’re constantly overspending every single month I highly recommend you to make a budget sheet I recommend you to use a budget sheet on Excel Microsoft Excel or use Google sheets which is free and build a budget sheet were it will show all your expenses for example like rent a phone car loan insurance food and also shows all your income coming in maybe from a job maybe part time job may be doing additional work on the side side hustles and then kind of calculate all the money that is coming in and all the money that is coming out and just kind of figure out where is my money going you know how come I’m overspending you know what is going on that could really really help you kind of key in and what areas you need help with and what really is the issue that is causing you’re overspending guys so every single month you know figure out hey where am I spending my money every single month and where every single month my money is coming in and kind of really pinpoint where everything is going alright guys so that’s pretty much it I hope you guys learned something from this video again a road to having a better credit score is gonna take a while it takes time guys but once you make a big change on your credit report make sure you follow up every single 30 days to kind of see if it’s been updating again you can get a free credit score credit report and credit score at Credit Karma to kind of see your score and again don’t forget annualcreditreport.com you could get a free credit report from each agency hope you learn something don’t forget to subscribe make comments if you have questions please ask those questions at the bottom of the YouTube comments if you have any comments make sure you do that and if you love this video I do make new videos every single Wednesday so subscribe to my channel guys take care of guys thank you very much

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