Credit scores measure how well you’re able to manage and pay back debts. Lenders use this number, which ranges between 300-850, to determine whether to approve a request and what the loan interest rate should be. Many factors affect it, including how long you've been building your credit and your payment history. If your score is currently low due to missed payments, there are ways of increasing it again. Below are several tips from financial services professionals to help.

How to Repair Your Credit

1. Identify & Report Mistakes

National credit bureaus (like www.freecreditreport.com) will provide a free copy of your credit report each year upon request. Carefully comb through it to look for mistakes. There may be false missed payments. A financial services professional can help you compare the report against your finances.

Next, dispute these errors with the lenders, collection agencies, and other institutions that reported them. 

2. Pay Down Balances

Your score will increase as you lower credit card balances or catch up on late car loan payments. Doing this improves your available credit balance—how much credit you have through your credit cards—and, subsequently, your credit score. Start with your high-interest debts first, so you stop accruing more debt through the interest rates.

If you tend to forget when your credit card bill is due, set up auto-payments to cover at least the minimum balance. 

3. Get More Credit

A new credit card can be beneficial as long as you’re responsible. Many let you transfer high-interest debt from another card in a process called a balance transfer. The new card often has a no-interest promotional period or lower interest rate. The only stipulation is that these may have high penalty rates, so make sure you can meet the monthly payments on time. 

You also increase your total available credit, which can help improve your debt to credit ratio, thus improving your score. 

To rebuild your credit, consider a saving-secured Visa which pledges your savings account to obtain credit when you may not normally qualify.

Are you looking for a loan or a means of building your credit score? Contact Estacado Federal Credit Union in Hobbs, NM. This credit union has welcomed customers for 65 years and offers a variety of financial services. Their skilled team will help you explore car financing and mortgage loans. Call (575) 393-1596 X2013 to speak with a loan officer. Connect on Facebook for more finance tips. You can learn more about the credit union on their website.