5 MUST DO THINGS TO IMPROVE YOUR CREDIT SCORE:
1. Obtain copy of your report. Clean up your credit as much as possible. Invariably, there may be erroneous information listed, often times due to human error. This information often passes through several different data entry operators. Itemize each of these listings and list them in a dispute letter to the respective credit bureau reporting this information, along with any corrections to your personal profile such as, spouse, date of birth, middle name, previous addresses, and employer, anything that is incorrect and can tarnish the picture of your character being painted by this report. This is all the lenders have to look at, and in addition to your score, influences their decision to grant you credit.
2. Pay your bills on time. Missed or delinquent payments negatively impact your credit score. This is the single most substantial factor in building and maintaining your credit. If you do have adverse information on your report such as late payments, excessive inquiries, public records (judgments, liens, bankruptcies) pay your bills and wait. Time is your foremost supporter in improving credit. There is no immediate renovation for bad credit.
3. Keep balances low on credit accounts you already have. Do not overextend yourself, minimize outstanding debt and balances, and do not apply for credit needlessly.
4. Pay off debt, rather than moving it around. Closing one or two accounts not only lowers the number of open installment accounts but it also lowers the total number of all open accounts. So if you have more open accounts with higher balances, it will lower your overall score. For this reason, it is a good idea to have some cards with zero balances in your portfolio to help increase your rating.
5. Open new credit accounts only as needed. Inquiries show on your report for two years. They can, and do, affect your overall score. It suggests to credit granters that you may be too willing to take on new debt. It is best to use the credit you already have to prove you can manage credit wisely.
Keep in mind you do not rebuild credit scores. You rebuild your credit history. You rebuild your credit history with the addition of positive items, such as, timely payments, low account balances, and lack of inquiries. Negative additions to your report directly affect your scores for an allotted period of time. Inquiries remain on your record for two years. Late payments and most public records remain for seven years, although bankruptcies can be present for up to ten years. Unpaid tax liens remain for 15 years.
By following these guidelines, and with the benefit of time, you can increase your credit score. There are no quick fixes or magic cure. Be skeptical of anyone, or any company that promises a sure way to increase your score especially if there is a fee involved.