In today’s world, good credit means a lot. Credit affects a person’s ability to purchase a home, a car, and even insurance rates. With so much emphasis placed on credit, it’s extremely important that every person knows how to repair, improve, and protect their credit score. Here are ten credit tips to help repair and raise your credit score quickly.
1. Get a current copy of your credit report
Start by requesting a free copy of your credit report from the three main credit agencies; Equifax, Tran-union and Experian. You can request the reports online from the company’s websites, or through annualcreditreport.com. You are legally entitled to one free credit report each year from every agency.
2. Review your reports
Take some time and thoroughly review your credit reports. Check for any errors or discrepancies. If you spot any errors, request the credit bureau to correct them. Some common errors include wrong names, social security numbers, addresses, or mixed account numbers. You can also dispute any inaccurate accounts. In the creditor put a derogatory credit on your report and cannot provide evidence that you owe the debt, it should be removed from the report.
3. Bring your accounts current
If you have any due accounts, concentrate on bringing them current. You can bring your student loan current by negotiating with the creditor on a suitable payment arrangement. Then after six months of on-time payments, the creditor will most likely report your account as current. To ensure you pay your future payments on time, change the payments to an automatic deduction. However, talk to the creditor first.
4. Get a secured credit card
Start rebuilding your credit. Getting a secure credit card is one way of obtaining a new credit. You can get your secured credit card from local banks, credit unions or from large banks online. To get this card, you will need to deposit $300-$500 to your new account. This type of credit card reports payment activities to the credit bureaus just like the standard credit card. You may need a co-signer if the credit scores are below 500.
5. Upgrade your credit card
Time has always been a great friend when it comes to changing any history. After about 6 months of on-time payments with your new secure card, ask your lender to upgrade the card to a standard card. After this, ask for the limit to be increased. This will give you more time to keep your balance just under 30 % of available limit. The best place to start is department store cards because they are usually easier to qualify for.
6. Limit your enquiries
When looking for a new credit card, auto loan, or even installment, do your research first. Find out all the requirements; if you don’t qualify for any loan, look for another lending institution. Too many enquires will only help drop your credit scores. So, limit them as much as possible.
7. Pay your bills on time
Always make sure you pay your bills on time. One late payment can drastically reduce your credit score. It doesn’t matter if it’s just a day late, a late payment will negatively affect your overall score. If you think a payment will be late, contact the creditor for an extension. Many companies are willing to do this once a year.
8. Avoid having a bill sent to collections
Even if a bill is paid off, the collection report will stay on a credit report for seven years. You can work with the creditor and arrange monthly payments before any bill is sent to collections. Many creditors will accept monthly payments as long as payments are made on time each month.
9. Always pay close attention to your credit report
This is extremely important. Any errors or unauthorized charges must be disputed immediately. As soon as a suspicious account appears on your credit report, it must be investigated immediately.
10. Don’t close credit cards
Avoid closing accounts that are currently not in use. Credit card scores heavily depend on credit history. You can use your old credit card for minor purchases from time to time just to keep it active. Keep in mind that, an old credit history always has a better credit score.