Baby Steps to Boost your Credit Score

If you are considering making any type of purchase whether it’s a house, a car, or just automobile insurance, your credit score can either help or hurt you. Potential creditors review your score to see if they can trust you to pay your bills on time. Building and maintaining a good credit score is important, but it can take time. The following are baby steps that you can take to boost your credit score:

1.) Know your score: The first thing you need to do is know your credit score. Get a copy of your credit report from all three of the major credit bureaus- Equifax, TransUnion, and Experian. Review each report. Once a year, you can get a copy for free. You can also get one for free after you have been denied credit.

2.) Dispute negative information:  Once you have gotten your credit reports from all three credit bureaus, be sure to check your credit information. Check for any discrepancies or negative information. You can have negative or false information removed by writing a letter to the credit bureaus disputing the information. The reporting company will have to verify the information. After about 30 days if they have not responded or verified the information with supporting documents, the reporting company will have to remove the information. This can boost your credit score quickly.

3.) Pay on time: Making on time payments will help to improve your credit score.  Reporting companies send in account information every 30 days. So, it is vital that you pay your bills on time. As you continue to pay on time, your score will gradually increase.

4.) Keep old accounts:  It may not seem to make any sense, but keep open some of your old accounts. The length of time that you have had credit also plays into your calculating your credit score. The longer you have had a positive credit score the better.

5.) Get Credit:  If you don’t have any credit, you will have to get some. This will build your credit history. Obtain credit if you don’t have any may be difficult. This is when a secure credit card may come in handy.

6.) Secure credit cards: If you can’t get credit any other way, a secure credit card can be a solution.  Secure credit cards do require the cardholder to make an initial deposit into a secure account. The cardholder may then use the credit card just like any other card. The cardholder receives a monthly bill and is required to pay that bill on time. The credit limit of the card is usually the same as the amount of the deposit made by the cardholder. Secure credit cards do report to the major credit bureaus, so paying them as agreed is vital. By paying on time, your credit score will start to go up. 

7.)  Negotiate with creditors:  If you are having trouble paying your bills, don’t just do nothing and hope they will go away. Give your creditor a call and see if you can make payment arrangement. Your creditors may lower or even suspend your payments of a while. This will stop companies from reporting that you are delinquent or stop possible collection action which can ruin your credit.

8.)  Avoid excessive inquiries:  When you apply for credit of any kind, the potential creditor does an inquiry. These inquiries will be added to your credit report and drop your credit score. If you’re shopping for a car or a mortgage, multiple inquires within a 30-45 day period will not hurt your score as much. They will be counted as one single inquiry.

Having a good credit score is important. Don’t despair if your score is less than perfect. The steps listed above are simple ways to boost your score.