Improving Your Credit Score
Once you start scrutinizing your credit score and you realize that it could be improved, then you need to know the things that can make this happen. Many people feel helpless when they realize that there credit report is not so good. However, there are plenty things you can do to get started improving your credit score. Here is what you need to know.
A Few Important Facts
When it comes to improving your credit score, you must understand that it will require time and work to get this done. It took a while for your credit report to get in bad shape. It will not repair itself overnight. If you see anything that claims a company will be able to clean up your credit score immediately, keep in mind that this is just not possible. Do not expect an easy way out.
Keep in mind that you actually have three credit scores that could be consulted by potential lenders. In other words, there are three different credit reporting agencies, and different bills may be reported to all of them or just one or two of them. The three agencies include Equifax, Experian, and TransUnion. You will need to work on improving your credit score with all three of them.
It is vital that you do everything that you can in order to improve your credit score. If your score is low, you will find it much harder to get any sort of credit, like financing for vehicles or homes or even loans. Even if you are able to secure credit, you will find that the interest rate you are left with will be very high. Some companies will use your credit score to determine whether or not you have to pay deposits for their services. If you improve your credit score, you can avoid paying these non refundable deposits.
How to Start Improving Your Credit Score
Before you can improve your credit score, you will need to get a copy of your credit report from each of the three reporting agencies. Then you will need to start looking over the report to determine where the problems are. You cannot improve your score if you do not know what is wrong with it.
After you get acquainted with your credit reports, it will be time to get to work. Keep in mind that it will take time to improve your score and it will take work. You cannot just make a wish and get a credit score in the seven hundreds. Here are the things that you need to do in order to start improving your credit score.
- Close any open accounts with zero balances. Any open account will have a negative effect on your score, so closing these accounts can help immediately. You may not have even remembered you had an open account, so review your credit report thoroughly.
- Consolidate any accounts that you can. If you have several credit cards and you have room on one of them to consolidate, then do so. One account with a higher balance will be a little better for your score than several accounts with balances. Once you consolidate, close the zero balance accounts.
- Pay off anything you can. The more you can pay down and the less debt that your credit report is showing, the better. The easiest way to make this happen would be to pay off the smallest accounts first. Go ahead and close those accounts as soon as they are paid.
- Dispute anything incorrect on your report. Sometimes, things get reported incorrectly, and you may not have realized it if you did not check your score. When you find these things, write to the credit reporting agency and begin the process of getting them removed.
- Pay your bills on time. The worst thing you will want to do is more damage to your credit report. From now on, make sure you pay your bills on time.
- Talk to medical facilities. If you have negative marks on your credit report and they have to do with medical bills, then talk to the medical facility. If you keep your account with them in good standing and you have been paying them, they can possibly retract the negative mark on your credit score.
If you plan on getting any type of financing any time in the near future, it is vital that you do everything you can to get your credit score up. That means, you need to take action in order to start improving your credit score through the methods mentioned above.