5 Steps To Improve Your Credit Score
By Pam Standlee
1. Check Your Credit Report: Credit repair begins with your credit report. You can request a free copy of your credit report(s) by going to (the only official site): www.AnnualCreditReport.com. Your credit report contains the data used to calculate your score and it may contain errors. If you find errors on any of your reports, dispute them (in writing) with the credit bureau and the creditor that is reporting the error.
2. Errors to Look For/Dispute Include: Account not mine, wasn’t late, duplicate account, incorrect balance, past due amount (a past due amount reporting will make your credit scores plummet), not reporting a positive account on report, not reporting correct credit limit, not reporting any limit (this makes the balance reflect as over credit limit or over 100% of utilization), account was included in BK and should have zero balance, Authorized User account with high balance or lates (can easily be removed), Home Equity Lines of Credit should report as installment or mortgage payments (not revolving), unauthorized inquiries, tax liens, judgments or public records have been satisfied, released, dismissed or vacated, charge off/collection still reporting lates, statute has been met, misspelling of name, address, or wrong social security number.
3. Pay Your Bills on Time: The biggest factor in determining your credit score is a history of timely payments. Consider setting up each of your bills on automatic payment from your bank account so you don’t miss any. This is also a great way to avoid late fees. Just be sure you have enough money in your account or you could be facing a different type of fee from your bank. One late payment can have a huge negative impact to your credit score.
4. Bring Delinquent Accounts Current ASAP: Accounts that are currently past due can devastate your credit score. If you can’t bring past due accounts current right away, contact your creditors to work out a repayment schedule. Please note that I am not referring to collection accounts. Those are an entirely different animal! Feel free to contact us for specific instructions when it comes to collections. They are VERY tricky and one misstep can easily ruin your credit score.
5. Reduce the Amount of Debt You Owe on Revolving Credit: The second most important factor in determining your credit score is the percentage of your available credit that you’re using, known as your “credit utilization.” Try to pay down credit cards to at least 30% of the credit limit. Once your debt gets above that, it can really start driving your credit score down. If you have a credit card with a high fee, see if you can convert it to a no-fee card instead. If you are being charged outrageous interest rates, contact the creditor to see what available programs they may have to assist you… let them know you are struggling to keep up with the payments. The goal is to get your revolving debt below 30% of the available credit limit (at least) on each card. Do not close these cards out. Doing so will reduce your overall amount of available credit and increase your overall utilization.
It’s important to note that repairing bad credit takes time and there is no quick way to fix a credit score. In fact, out of all of the ways to improve a credit score, quick-fix efforts are the most likely to backfire, so beware of any advice that claims to improve your credit score fast. The best advice for rebuilding credit is to manage it responsibly over time. If you haven’t done that, then you need to repair your credit history before you begin to see credit score improvement. Please let us know if we can give you any guidance.
Since 1999, Pam Standlee has worked in the credit industry for some of the nation’s largest Credit Reporting Agencies. She is dedicated to educating consumers on the intricacies of credit scoring and
has a thorough and in-depth knowledge of the credit scoring models and system. Simply put, she understands credit inside and out.
Pam Standlee owner
1024 Iron Point Road
Folsom, CA 95630