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3 Reasons You Might Have Fair Credit Instead of Good Credit

Jan. 5, 2015
Credit Score, Personal Finance
3 Reasons You Might Have Fair Credit Instead of Good Credit
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If you have recently discovered that your have fair credit instead of good credit, don’t worry! You can take steps to boost your score. Take a look at the following reasons why you might have fair credit, and see what you can do about them.

1. There are mistakes on your credit report.

You should request a copy of your credit report from one of the three major credit reporting agencies—Equifax, Experian or TransUnion. You get one annual free report from each agency. Once you get your credit report, carefully look through it to see if there are any errors. If you spot any, dispute them right away with the appropriate agency. After the agency corrects the mistakes, you could see a rise in your fair credit in just a few months. If the errors were substantial enough, you might even move from fair credit to good credit.

2. You’re carrying a lot of debt.

If you have a large amount of debt—no matter the type—you are negatively impacting your credit score. This could be a major reason why you have fair credit instead of good credit. To begin remedying this situation, divert as much of your disposable income as you can toward paying down your debts. Tackle the debt with the highest interest rate first, then work your way down to the debt with the lowest interest rate. You want to approach it this way because the less interest you have to pay over time, the more money you have to put toward paying of the debts themselves.

3. You’ve had too many inquiries from lenders.

If you’ve applied for multiple new lines of credit recently, you could have dinged your credit so that it is now fair instead of good—lots of inquiries into your credit looks suspicious to the credit bureaus. In the future, plan out your applications for new lines of credit throughout the year so that you don’t repeat this misstep.

These three situations could be part of the reason you have a fair credit score instead of a good one. By working to improve each, you can move toward a higher credit score and enjoy the benefits that come with it.

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