There are a lot of ways to improve your credit score. One way is to ensure that you do not have anything negative on your credit report and that you have a low balance on any loan that you have. There are companies that promise to fix your credit, ultimately improving your credit score in the end, but why pay for something you can do yourself?
You can improve your credit score on your own by doing the following:
- Ordering your credit report from Equifax, Experian and Transunion. This will tell you what exactly is on your credit report not just what score you have. Carefully look at all three credit reports to see if there are any inaccuracies on your credit report that you can and should dispute. You can dispute items on your credit report directly to the credit bureau agencies. If there are negative items on your credit report due to a late payment or payments, contact the company and see if you can enter into a payment plan so that you can start making the payments timely and eventually get the delinquency removed from your credit report once the item(s) are paid. I once was late in returning a Comcast Cable box and was shocked when the value of the box was placed on my credit report. I drove to my nearest Comcast and then reported the items as returned to Comcast so this would be taken off my credit report.
- Pay all your bills on time. Timeliness is next to ….. Well, you know what the saying is. But paying your bills on time is a key factor in making sure your credit score improves.
- Pay off your debt and keep your revolving balances low. Once you get out of debt don’t go back into debt. Paying off your debt can mean a huge increase in your credit score.
- Don’t close out your credit cards. Closing out your credit cards will bring your credit score down. If you are in fear that you will use the credit card then either put it on ice (literally put in in some water in a cup and keep it in your freezer), or cut the credit cards up.
- Open a secured credit card. A secured credit card is a card in which you use your own money to establish a credit limit and when you use it, and pay your “balance”, your payments are reported to the credit union.
- Do not open any additional credit cards or lines of credit not even retail store credit cards. Part of your credit score is based upon what is called “utilization.” Utilization is simply how much credit are you using out of how much credit you have. So, if you have $10,000 in credit and your credit cards have an $8,000 balance, your credit score will be low. On the contrary, if you have $10,000 in credit, and you have $2,000 in credit used, your credit score will be higher.
Work on reducing your debt and not accumulating any additional debt. Do not pay for something that you can do for free.