How to Fix Your Credit Score in 2021

For better or worse, your credit score is one of the largest contributing factors when you want to borrow money. When lenders see a lower than average score, they may have reservations about giving you access to credit.
The good news for anyone who has struggled with a low credit score in the past is that your score can change based on your good financial decisions. But before you understand how to fix your credit score, it’s important to cover what exactly it is and what contributes to that all-important magical number.
What is a Credit Score?
A credit score is a numerical value between 300 and 850 that reflects your riskiness as a borrower. A higher score indicates someone who is less risky and has a higher propensity to repay debts.
How is my Credit Score Calculated?
There are several types of credit scoring models, including FICO and VantageScore. Both use similar factors to come up with your credit score, but weigh them a bit differently. The more widely used FICO score breaks down the contributing factors for your credit score as follows:
To create your score, creditors report information related to these key areas to the three major credit reporting bureaus: Experian, Equifax, and TransUnion. Since your credit score comprises items tracked on your credit report, it’s essential to review a copy of your report. Everyone is entitled to a free credit report from each of the three major credit reporting bureaus once per year.
How Can I Fix My Credit Score?
Once you have access to your credit report and review it, you can take the following steps to fix your credit score:
Notice: Information provided in this article is for informational purposes only. Consult your financial advisor about your financial circumstances.
Source: iQuanti, Inc.