5 Ways to Improve Your Credit Score
Credit plays a big role in today's society, affecting everything from what you can buy to what kind of home you live in. And with the economic recession taking its toll on many industries, more and more consumers are seeking ways to protect their credit score. We've even seen a new breed of professionals specializing in credit repair and improvement, as well as loans made specifically for people with damaged credit.
Of course, a good credit score starts with the consumer himself. Here are some ways you can improve your credit score today.
Limit credit card use.
Credit card purchases add up easily, sometimes without the user noticing until the bill arrives. And if your credit score is already down, those little purchases won't do much to improve it. As much as possible, pay with cash or debit and stick to one credit card, using it sparingly until you’re on more stable ground.
Get your credit reports.
Obviously, the first step to credit repair is knowing where you stand. The three credit bureaus - TransUnion, Experian, and Equifax - all give different scores, and the problem can be with one or all of them. Go through each report and take note of items that don't seem to add up, and try to settle them with the creditors concerned.
Bring your accounts current.
More than a third of your credit score comes from your payment history, or how timely you are on paying your debt. The more missed payments you have and the farther behind they are, the more they affect your credit score. Delinquent accounts significantly pull down your score, but getting them back in track is a major step towards credit repair.
Don't take out more credit.
The last thing you want to do when you're working on your credit score is take out more credit. Besides, it's hard to get approved for anything when you're in the credit repair process. Even if you do get a loan, credit bureaus see it as a sign that you're still highly credit-dependent despite being behind, and this can affect your credit score.
Consider repayment plans.
If you have too much credit to handle comfortably, consider requesting a repayment plan or debt consolidation from your creditors. They're probably not the first person you'd want to call, but sometimes they're the ones who can help you best. With a good justification and smart negotiations, they can play a crucial role in your credit repair.
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