Your credit score is one of the most important numbers in your life. It can affect your ability to get a loan, rent an apartment, and even get a job. That’s why it’s so important to make sure that your credit score is as high as possible. In this blog post, we will discuss six steps that you can take to improve your credit score. Follow these steps and you will be on your way to improving your credit rating!
1. Check your credit report for errors and dispute them
It is important to check your credit report for errors because it could be hurting your score. If there’s an error on the report, then it will lower the overall rating that lenders see when they view your information. Make sure that all of these items have been removed from the account history before sending a dispute letter.
Dispute letters should be sent to the credit bureau that is reporting the error as well as the lender who is reporting the information. Be sure to keep copies of all correspondence for your records.
2. Pay your bills on time, every time
Paying your bills on time is one of the most important things you can do to improve your credit score. This will show lenders that they can count on you when it comes down to paying back money owed them by showing them a history of timely payments in the past.
The first step is getting a copy of your current bill from any company where bills are due. If you don’t have access to this information, contact the business directly or go online to find out when each bill is scheduled for payment and what their policy is regarding late payments.
Once all of your current bills are paid off, it’s time to look at any past due ones that might be hurting your score. If you have any outstanding balances from companies that no longer exist, contact them directly to get an updated account history or payment plan.
If there is an issue with one of your current accounts where bills are due but not being paid on time (such as medical debt), then consider calling the company and speaking directly with a supervisor about how they can help resolve this issue.
If none of these options work, then look into getting debt consolidation loans which may allow you to pay off all outstanding debts in one lump sum instead of having multiple smaller ones spread out over time with interest rates that vary depending on each company’s policies and policies surrounding them (i.e., medical debt might be able to be consolidated more easily than credit card debt).
Lastly, if you have any past due accounts that are hurting your score but they’re not being reported as such yet because it hasn’t been 30 days since their last payment date then consider sending an email to the creditor asking them what steps they need from you so that they can remove this negative information from your report.
3. Keep your credit utilization low – don’t max out your credit cards
Don’t max out your cards! Keep spending under control by paying attention to how much money you owe each month on these accounts and making sure it doesn’t exceed 30% of your total limit.
If you are currently maxed out on your cards, then it’s time to start paying them down. Contact the credit card company and ask for a higher limit so that you can keep your utilization ratio low.
4. Don’t apply for too many new lines of credit at once
When you’re trying to improve your credit score, it’s important not to apply for too many new lines of credit all at once. This will look bad to lenders and could lower your rating.
If you are in need of a new line of credit, then consider applying for a secured card instead. Secured cards require a security deposit which is usually equal to the amount of money you are borrowing. This way, if you do happen to miss a payment or rack up too much debt, the card issuer can take the money from your deposit instead of going after you for it.
There are also credit builder loans which work in a similar way as secured cards – the only difference is that there isn’t any actual money being borrowed! Instead, this type of loan will help build your score by reporting positive activity on an account that doesn’t actually exist yet (for example, if you pay $100 toward a credit builder loan every month for one year and then apply more than 24 months later).
5. Don’t close old accounts – this will actually lower your score
The best thing to do with old accounts is simply don’t use them anymore.
When you’re working on improving your credit score, it’s important not to close any old accounts. This may seem like the right thing to do in order to get rid of some extra debt, but it will actually lower your score in the long run.
Lenders like to see a lengthy history of good credit behavior and by closing older accounts, you’re effectively shortening that history.
If you have accounts that are still open but not being used, then consider putting them in a safety deposit box or other secure location so they don’t tempt you into using them again later on down the road when times might get tough once more.
6. Use a credit monitoring service to keep track of your score and protect yourself from identity theft
There are a lot of credit monitoring services out there that can help you keep track of your score and protect yourself from identity theft.
Some examples include: Experian which offers protection against fraud with alerts via email when they detect suspicious activity, Credit Karma which allows users to check their credit reports for free as many times per year as desired, and Credit Sesame which offers a free credit score, identity theft protection, and other helpful resources.
If you’ve ever had to deal with the frustration of a credit score that doesn’t measure up, then this article is for you. We’ve compiled six steps that will help improve your credit score and make it easier to rent an apartment or get approved for loans. Stay tuned as we continue to provide more updates on how you can take control of your finances!
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