A 300 credit score? It’s time for your heart to skip a beat! We definitely don’t want to scare you but it is an alarming score if you are looking forward to obtaining a credit card, mortgage or any type of loan as such. It is a terrible credit score and is the lowest score possible. Such a credit score indicates that you had problems making payments in your past, which could also mean having your home foreclosed or going through bankruptcy. This gives a strong warning of risk to potential lenders that they might not get their money lent back from the borrower. Therefore, a 300 credit score can make things very difficult for you if you are in need of an unsecured credit card or a loan. You might need to build your credit reputation before you try to apply for a car loan, mortgage, etc. Also, turning such an awful score into a good one is not easy, but not even impossible. Everything is easy for experts at Credit Bazaar who will help you to increase your score over a period of time. A 700+ credit score is accepted as a good credit score, but there are various steps you need to undertake on a continuous basis for jumping up your stake from the lowest to a 700+ score. It can’t even be said that you have a decent enough credit score until you reach 640. But don’t worry because when Credit Bazaar is with you, you do not have to lose hope at all. You’re definitely not alone, there are numerous people along with you who have less than 5% credit score and there are several ways, major and minor, in which you can increase your credit score promptly.
How does a 300 credit score affect your borrowing power?
Unless all that you are looking for is a student loan, it might be very difficult for you to borrow any loans with a 300 credit score. Very few lines of credit and types of loans are open to people who have too low scores, such as less than 540. Precisely, it is unlikely that you might qualify for a mortgage loan with such a low credit score, which is 300. The best bet you can go for is to get a refundable deposit on a secured-type credit card. Such a kind of card will help you to build credit in a responsible manner, however, it will not give you a loan. Overall, this just means that you have a card for which you have to pay the bill on time, each and every month, or just lock it in a drawer and make no purchases whatsoever. Moving ahead, when your credit score increases a little, you might qualify for an unsecured credit card which can help you to power up your credit building efforts when used in a responsible manner.
What are the guaranteed ways for increasing a 300 credit score?
We, at Credit Bazaar, provide you personalized credit-improvement suggestions for increasing your credit score. The team of professionals available with us provides assistance for fixing credit scores if you are lying low at 300. Specific advice will be given on how to improve your credit score, by analyzing each and every area of your credit report. Essentially for the people with a 300 credit score, the following factors can be kept under consideration:
- Avoid the quick-fix trick: There might be lots of companies that might advertise boldly about being able to instantly fix or repair your credit. Beware! It’s a scam. There are no immediate solutions for a bad credit score. Everything happens slowly and gradually. The recovery process takes approximately 12-18 months for just progressing to a fair rating. So, don’t be in a hurry, just relax and steady baby steps can help you pave your way to a decent enough score.
- Have a pep talk with your creditors: Is paying off your debts giving you jitters? Or do you just have a lot on your plate and are not able to pay off your dues? Well, loans can cause a lot of stress and have the power to drive you crazy. So, it is better to have a face-to-face talk with your lenders or your credit card company’s personnel and try to work out a helpful arrangement that works well from both the ends. Both parties must come to a common solution so that you are relieved. Also, remember to get this agreement in writing for proof purposes. However, the pitfall here is that some of these arrangements might give you a breather at the moment however it can also hurt your credit score. It actually depends on the arrangement you make them do such as for the resolution of changing your due date to ten days later after your paycheck arrives for your credit card will not hurt your score. On the other hand, if you ask your lender to lessen your loan balance, it will lower your credit score.
- Find solutions to fixing up crucial credit report errors: Once a year, you can get your free credit reports from three of the major credit reporting bureaus. However, the reports provided by all three bureaus may vary, subject to the information that they are able to collect. Whenever you get hold of your report, go through it entirely, every given point, in detail. In case you find any mistake in the report, you need to follow the steps outlined on the website of the agency for filing a dispute. Take immediate action for filing the dispute because the corrections need to be done immediately. Further, the agency is required to look into the matter, investigate in detail and report it back to you.
- Keep your aim to pay at least the minimums: Each and every time, on every account, just make sure you at least make the minimum payment of the amount due on time. One might not always have the cash for paying off the balances completely or even make a serious crack in them, however, just making the minimum payment by each and every month’s deadline can help your score to increase or at least to remain stable.
- Don’t require that credit card? Still don’t close that account: We understand that you might want to close the credit cards that you no longer use, but you will have to keep that temptation on hold for now if you do not want to decrease your credit score any further. This is because such a move can affect your credit score. When one closes a credit card, the overall available credit with the person is reduced, thus, shortening your credit utilization ratio and the average age of accounts. All these are significant factors in your score that you need to build appropriately.
- Scrutinize those missed payments: Sit down with your credit report and all your credit information, check all the monthly payments that you have missed and prepare for paying them off. Making up for such delayed payments and disbursing them immediately can prevent any further damage from your credit score and avoid any worsening. A point of concern here is that your account should not be defaulted as of now because then the delinquency has already taken place and the top worries for you now are to deal with a lawsuit and collections account. Both of these are terrible for your credit score, however, they can be avoided if you repay your amounts owed immediately.
- Always compensate on the time moving forward: The lion’s share of your credit score is factorized by your payment history. On the other hand, if you look at the brighter side, every month gives you a new opportunity to improvise with respect to this. In this way, you can create a positive account for yourself in the present. Since you have started paying on time now, every month you pay the bill of your credit card by the due date, it covers up your past mistakes a little bit more. Hence, a new track record of responsibility is established progressively. The best thing here is that you do not even need to utilize your credit card for benefit. If you do not use your credit card at all, you are still considered as paying the dues on time when the account information is reported by the issuer to the major credit agencies every month. Thus, if you are a spendthrift and have no control over your expenditures, just plainly lock your card in your drawer and forget about it. You will be still declared a responsible user in front of the credit bureaus.
- Always use a secured credit card: Do not go for an unsecured credit card as your score is already too low to bear the burden of such a bad deal. Since a credit card is actually the most accessible tool for building credit that is available to the customers, it is most preferable to open a secured credit card only. Secured cards are exceptional as they require the customers to place a refundable security deposit on a prior basis. The amount of this deposit serves as the spending limit of the user. Thus, the issuers are protected against any risk as such, thus enabling them to offer nearly guaranteed acceptance and to charge minimal fees.
- Keep an emergency fund: Just keeping money aside every month as saving is not going to increase your credit score automatically, but it will shield you with any sudden or unexpected expenses that could crop up. Such unanticipated events could derail your plans of building your credit score and all your efforts could go into the drain. As a matter of fact, it is preferable to begin feeding an emergency fund and saving up before focusing on getting out of a debt situation, if you have any. In this way, you can be relaxed as this fund will help you to cover your debts and keep your credit score increasing or stable at the least.
- Keep adding to your deposit over a period of time: Everything in the credit world goes hand in hand, so the higher the credit extended to you, is directly proportional to the rise of your credit score. When you are using a secured card, you have complete control over your credit line, therefore you can simply deposit more money to accelerate your credit building efforts. Do not stress as you will get your deposit back, subtracting any fees or outstanding balances, while closing your account.
- Remove all harmful items: You definitely require a repair service if your score is 300. In this way, the credit-assisting agencies take a step forward for disputing items on your behalf so that they are not harming your creditworthiness in any way. Such harmful items can further decrease your credit score and need to be removed immediately.
Overall, for improving a 300 credit score you just have to remove all the negative factors such as charge-offs, bankruptcies, medical bills, collections and so on. Eliminate all the excess hard inquiries as much as you can. Make your credit utilization ratio as low as possible and ensure that you have a really good credit mix of revolving accounts and installment loans. Lastly, make sure that you have a minimum of two revolving accounts older than 2 years, if not you can even get added to an authorized family member or a friend’s credit card for help. In the end, you just need to have patience as the negative factors on your credit report cannot be removed overnight. Depending on what type of offense it is, the records will remain. The only thing which can take place slowly and steadily is that you can dilute these records by adding positive information about your credit handling such as reporting on-time payments. Credit Bazaar helps and provides thorough consultation along with incredible customer service to the clients for solving their credit score problems.
For any queries regarding Credit Score improvement or Loan contact Credit Bazaar CR Arcade 2nd Floor, Opposite Delta Garden, Next to Shree Mahalaxmi Restaurant, Mira Road East, Thane : 401107