Ten Easy Ways
To Improve Your Credit Score
How
do you improve your credit score? That’s the question we see every day on
blogs and places like Yahoo.Answers. We respond as openly and honestly as we
can to these questions, but the truth is there are several steps involved and a whole lot of waiting.
Here
are 10 ways that you can improve your credit score with a little work and
time:
Get A
Copy Of Your Credit Report And check It For Errors
Order a copy of your credit
report. You can’t begin improving your credit until you know
exactly what needs fixed. The credit bureaus calculate that 79% of the credit
reports contain errors. It doesn’t matter who is at fault, the fact is there
probably are errors on your credit. And the sooner you find out about them the
better!
Clean Up
Your Credit Report
If
your credit report contains errors, and I’d be willing to bet it does,
identify these and start the process of having them removed.
You
have the right to dispute anything on your credit report that you feel is
inaccurate, that means late charges, credit cards that you may not have ever
had (from someone else’s report – it happens).
One
thing you must be aware of – it is not as simple as articles on the web make
it seem to clean up your credit. Each error must be disputed INDIVIDUALLY.
You’re not allowed to send in a blanket letter with 5 or 6 mistakes on it. It
takes time (lots and lots of time), persistence and the tenacity of a bulldog.
You
may decide it’s too big for you to handle and want some expert help. But be
careful! Some of the fly-by-night companies that promise to improve your
credit score (by 50 points in 30 days or whatever they say) will make the
problem worse and you have enough problems already. That’s why we recommend
Lexington Law, a law firm with both the experience and the integrity you
need.
Lexington Law has been around a long time – and they do most of the work so
you don’t have to. Plus
Lexington Law charges by the month so once they have done what s needed
you can cancel their services. Using a credit lawyer for mistakes on your
credit is probably the single smartest thing you can do to improve your credit
score.
Stop
Using Your Credit Cards
You
are already in a tight spot so don’t make the trouble worse by continuing to
add more debt. The more debt you have, the higher the monthly payments, the
more chance you have of being late on some of them because you can’t pay all
the minimum balances on your budget. Which will drive your score down.
Cut
them up and cancel them. Or if you are disciplined enough, put them away until
you are out of debt – either way, don’t use them – pay cash or use a debit
card. Having on-time payments is important to improve your credit score.
Lenders look for at least 12 straight months of on-time payments when
assessing whether you are a credit risk or not.
Get
Current On All Past Due Accounts
The
way you pay your bills (Your payment history) makes up 35% of your credit
report. So getting current on all your past due bills goes a long way
towards improving your credit score.
Don’t Apply For Any More
Credit Cards
As
long as you are in the credit repair mode you should resist the urge (This
can’t be stressed strongly enough) to apply for more credit. Applying for
additional credit will lower NOT improve your credit score. Another portion of
your score is based on how many open lines of credit you have. The more you
have the lower your score.
Keep
Accounts With Balances Open
You
may be tempted to close out credit cards that are delinquent. Before you do
that make sure that this won’t negatively affect your credit. It probably
will. Another part of your credit score calculation is based on “longevity.”
In other words, how long have you had the credit cards, or house, or car.
Longevity tells the lenders that you aren’t flakey.
Eliminating excess credit cards (if you have more than 3) will improve your
credit score because it will eliminate the amount of “potential debt” (what
you COULD run up if you decided to) you have. Just keep in mind that it’s
important to try to keep the oldest cards if you can.
Call
Your Creditors If You Are Behind On Payments
These
are the last people you want to talk to but you need to. Years ago my wife was
diagnosed with cancer and had to have surgery. Naturally my accounts got
behind but I called every one and was pleasantly surprised how they understood
and worked with me until we got current. On the other hand, if I had waited
until they called me numerous times they wouldn’t have been so helpful.
Pay Your Debts Off
Completely (This Takes Time, But It Should Be Your End-Goal)
-
You won’t really improve your credit score
until you start paying your debts off. For some ideas on how to do this you
can check out our tips page
here.
See If
Credit Counseling Is Right For You
If
your interest rates are so high that it looks like it will take 30 years to
pay them off consider a credit
counseling service. By setting up affordable payments that you make ON
TIME to the credit companies you will definitely improve your credit score
while eliminate that debt your drowning in.
A lot
of people won’t call a credit
counselor for various reasons. At one time or another everyone needs help
so take advantage of this service. If you aren’t sure about how credit
counseling works or if it will fit your needs you can check out our articles
on credit counseling here.
Finally,
Be Patient
Everyone has heard the
expression, “Rome wasn’t built in a day.” That’s true in this situation as
well. You didn’t get in debt overnight so it will take some time.
Be patient, it will
happen!
For more information on how to improve
your credit score click here.
