How To Improve Your Credit Score
Improving your credit score can seem like a daunting task. The credit bureaus claim to factor in hundreds of things and you have no direct control over your score.
This is incorrect. If you take a few steps you can positively influence your credit score.
1. Dispute and remove negative items on your credit report. This can be done yourself or you can hire a service to do it on your behalf.
2. Pay off any verified bad credit item on your report. In exchange for your payment have the lender remove the item from your credit report.
3. Pay your bills on time. It is alleged that missing one monthly payment can cause your score to drop by up to 50 points.
4. Open a new line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
This will also help you build a positive payment history by paying your monthly bill. However if you can not qualify for an unsecured credit card then open a secured card, but make sure it reports to all 3 bureaus.
In addition try to keep your monthly balance at 10% of your available credit. Doing this shows the bureaus that you do in fact use your credit and you use it responsibly.
5. Pay down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These are the five factors you should focus your efforts on. There is however one last factor that is surrounded by controversy.
6. Piggy back credit, this is when you are added as an authorized user on an account with a high credit limit and low balance. The benefit you get is the account is not reported on your credit history.
This tactic was widely abused and the scoring model has made some changes. It is said to have removed the benefit however it is debated as to if those changes have taken place yet.
In sum if you can take care of steps one through five then you will improve your score. With a high credit score your quality of life will also improve.
This is incorrect. If you take a few steps you can positively influence your credit score.
1. Dispute and remove negative items on your credit report. This can be done yourself or you can hire a service to do it on your behalf.
2. Pay off any verified bad credit item on your report. In exchange for your payment have the lender remove the item from your credit report.
3. Pay your bills on time. It is alleged that missing one monthly payment can cause your score to drop by up to 50 points.
4. Open a new line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
This will also help you build a positive payment history by paying your monthly bill. However if you can not qualify for an unsecured credit card then open a secured card, but make sure it reports to all 3 bureaus.
In addition try to keep your monthly balance at 10% of your available credit. Doing this shows the bureaus that you do in fact use your credit and you use it responsibly.
5. Pay down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These are the five factors you should focus your efforts on. There is however one last factor that is surrounded by controversy.
6. Piggy back credit, this is when you are added as an authorized user on an account with a high credit limit and low balance. The benefit you get is the account is not reported on your credit history.
This tactic was widely abused and the scoring model has made some changes. It is said to have removed the benefit however it is debated as to if those changes have taken place yet.
In sum if you can take care of steps one through five then you will improve your score. With a high credit score your quality of life will also improve.
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posted by Credit Counseling at
5:53 PM
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