Consumers in the US were using 25% of their available credit in 2020 and had an average credit card debt of $5,315 each.
Although 2018’s numbers were generally lower than 2019’s, probably as a result of the COVID-19 pandemic and lockdowns across the nation, people with very bad credit were discovered to have the highest credit utilization rate. (The ratio of your current balance to your credit limit is your credit utilization rate.)
Due to increased interest rates or being disqualified from credit offers, a low credit score can prevent you from getting the best deals on loans and credit cards. Obtaining utilities or a rental apartment may also be difficult for you.
In some cases, having a credit score below average can also hurt your chances of getting a job. Yet, you may rebuild and boost your credit score if it is lower than you’d want. It’s crucial to comprehend how your credit score is determined before you can fix it.
Your credit score is determined using information from your credit report, which includes details on all credit accounts, including credit cards, auto loans, school loans, and more. The three main consumer credit reporting agencies, Equifax, Experian, and TransUnion, receive this information.
Due to the fact that not all creditors and lenders report to all credit bureaus, you may have three separate credit scores with each bureau. Enhancing your credit rating: Examine your credit history and score. The first step in raising a low credit score is to look at and check your credit report for accuracy.
Free Credit Reports
Visit AnnualCreditReport.com to access free weekly credit reports from the three bureaus throughout the pandemic. Through 2026, Equifax is also offering up to six free credit reports. It’s crucial to obtain credit reports from each of the three credit reporting companies.
Monitoring your own credit score has little to no effect on it and won’t lower it. Challenge any mistakes. If you discover a mistake on one of your credit reports, report it right away. You can be required to present proof of the incorrect information. 30 days are given to the credit bureau to wrap up its inquiry.
In accordance with the Fair Credit Reporting Act, the reporting agency is given an additional 15 days to resolve the issue if it requests more information within that time frame. Depending on the issue, a fix can raise your credit score immediately.
To improve your score, you still need to put in more effort. Your payment history, which makes up 35% of your credit score, has the most influence. Paying your bills on time will assist you in raising your credit score.
Setting up automatic payments for your current accounts is one way to remember when your payments are due. By doing this, you can ensure that your payments are always made on time without having to remember to do it each month.