Your credit score is an important part of your financial situation. Having a good credit score can lead to loan approvals, better loan terms, and lower interest rates, to name a few. As such, obtaining and maintaining a high credit score could be vital to making and saving money. If you are just starting out with credit, the best thing you can do is pay your bills on time, maintain a high available credit to debt ratio, and maintain these practices for over three years. Additionally, you should never close a credit account because this will lower your credit score. Therefore, if you are unhappy with a particular credit card company, simply never use that card again, but do not close the account.
Things can be a little bit trickier if you already have established a credit history and that history is not a good one. Late payments, collection accounts, high debt amounts, and bankruptcies are just some of the things that can severely damage your credit scores. Some of these things are easy to fix (for example, if you have a high debt amount, you can lower this by paying off the debt) while others a far more difficult (for example, if you file for bankruptcy and are granted the same, that bankruptcy can remain on your credit report for up to 10 years and will severely damage your credit scores during that time). Therefore, if you have some or many of these problems on your credit report, you may have to get some professional help.
For the most part, if you want to improve your credit score you have to continue to make consistent, timely payments, maintain a low amount of debt (no more than 30% of your available credit) and keep your accounts open. However, these things will only do so much if your credit report is plagued by late payments, collection accounts, bankruptcies, or all of the above.
If you have late payments, collection accounts, bankruptcies, or any or all of these things in your credit report, you may have to hire the services of a professional “credit cleaner” in order to maximize the use of your credit report. For the most part, these companies dispute inaccurate information on your credit report in attempts to remove some of the late payments, collection data, and other negative information that have been compiled in your report. I do not know the extent that some companies are allowed to go regarding such things as bankruptcies, but a simple phone call to a reputable credit repair company will resolve this issue.
It is important to know that these service cost money and therefore, if you do not want to pay for such services you can always dispute problems on your credit report yourself. It is a simple process, but it is tedious and time consuming. As such, you may want to educate yourself on the process before attempting the same.
The traditional methods of making consistent, timely payments, maintaining a low amount of debt (no more than 30% of your available credit) and keeping your accounts open are the best way to obtain and maintain a high credit score. But if you have bigger problems on your credit report, you have to take action in order to correct these problems before your credit report can fully benefit from traditional methods.