7 Signs You Need to Repair Your Credit

Kelly Hernandez
A sad looking woman holding up her credit card.

If you know your financial history isn’t up to par, you may need to repair your credit. It can be hard to know when you need to dedicate the time and effort to repairing your credit, especially if you haven’t reviewed your credit report recently.

Taking the steps necessary to repair your credit is beneficial to your future financial opportunities. If you’re not sure whether you need to address your credit score and start working on improving your credit, review these seven warning signs. If you can relate to one or more of these indicators, your credit score and report may benefit from professional credit repair services.

Table of Contents

1. You Have Credit Card Debt

If your credit card debt has gotten out of control, you’re probably already aware that your financial habits need to change. Your credit card debt is mounting and you find yourself only making the minimum payment each month. Debt will only continue to grow until you make the necessary changes. Since an interest rate applies to your credit card balance, when you only make minimum payments, the debt continues to increase until it’s paid off.

When you have excessive credit card debt, it raises your credit utilization ratio. When this ratio is high, it lowers your credit score. Responsibly handling debt can build your credit and lenders or financial institutions will see this as positive history. However, too much debt that you’re not aggressively paying off drags down your score and your creditworthiness.

2. You Were Denied a Loan

One of the most important factors a lender looks at when deciding if you’ll be a responsible borrower is your credit score and history. It’s hard to be eligible for a loan with bad credit.

If you were recently denied a loan, it may be due to your lack of credit history, bad credit history, or a low credit score. Even if it’s the one and only time you’ve ever been denied for a loan, it’s important to review your credit report as soon as possible.

Secured Credit Cards

While every lender has its own qualifications, even just one denial is a sure sign that your credit needs work to prove you’re a trustworthy borrower. Beginning to repair your credit now is the best way to ensure you can eventually qualify for a loan in the future.

3. You’re Afraid to Check Your Credit Score

If the thought of checking your own credit score or reviewing your credit report scares you, it’s a sign that you need to start repairing your credit. If you know you won’t like what you see when you look at your report, it’s time to make a change to your financial behaviors so you can turn it around.

Your credit score indicates the health of your overall credit report, which is often the determining factor on whether you’ll be approved for a loan, credit card, or other financial transaction. If you know your credit score has been dropping for some time and you haven’t taken the necessary actions to improve it, hiring a reputable credit repair company may be the best way to see your score increase quickly.

4. You Can’t Open a Credit Account

If you recently attempted to apply for a new credit card account but were denied, it’s also a sign that you need to work on your credit. Credit card companies review your credit score, debt utilization ratio, and other items on your credit report before determining if you’ll be a responsible borrower. If the company pulls this information and believes you’re too risky for a credit card, it’s a sign that your credit needs attention.

A credit card is a convenient way to spend money and if handled responsibly, it’s also a way to build positive credit history and improve your score. If you’re denied a new credit card account, work with a credit repair company to improve your credit so you’re eventually eligible for a new account.

5. You Can’t Secure Living Necessities

You may find it hard to rent an apartment with bad credit since most leasing companies take tenants’ credit scores seriously. If you have a low score or unfavorable credit history, it’s likely that you’ll be denied by most landlords since they may assume you won’t be a responsible renter who pays your rent on time each month.

In some cases, a potential employer may also look at your credit report during a background check to verify that you’re financially responsible. Even if you’re qualified for the position and did well on your job interview, you could lose your shot at the role if your credit is bad. If you’re finding it hard to secure living necessities, such as a home or job, due to your credit report, it’s time to invest in credit repair so you can get back on track.

6. You’re Being Harassed by Debt Collectors

Another sign that you should consider repairing your credit is if you’ve been contacted by debt collection agencies recently. If you haven’t been paying your credit card bills or other debts, creditors may have sent your information to debt collectors to contact you on their behalf.

Debt collectors may call you, send letters, or visit your home in an attempt to collect the debt you owe. Once your debt has been sent to a collections agency, it’s likely to appear as a negative item on your credit report for years.

This will negatively affect your credit score and ability to borrow money or engage in other financial transactions in the future. If you’ve been contacted by a debt collector, focus on paying off your debts and repairing your credit as your next plan of action.

7. You Want to Change Your Credit Habits

If you know you’ve acted irresponsibly in the past when it comes to finances and you want to change your ways, focusing on repairing your credit may be a good first step. When you enlist the assistance of credit repair professionals, they can help you take the steps necessary to increase your credit score over time.

To make positive changes and improve your credit report, you need to implement better credit card habits and pay off debts. A credit repair professional will help you review your credit report for errors and negotiate a payment plan with creditors. A professional will also help you instill new and positive financial habits into your routine so you can actively and consistently repair your credit.

By implementing changes to your financial habits now, you can improve your credit score so you don’t miss out on financial opportunities in the future. When you set yourself up for long-term success with your credit, you can easily prove to lenders and financial institutions that you’re a responsible and trustworthy consumer and borrower.

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