Those improve your credit score ads you see online are often full of inaccuracies and misinformation. Fortunately, it is possible to increase your scores, but the process takes time, patience, and discipline. There are no overnight remedies if you currently have less than average ratings from the three major bureaus. There is good news. Consumers who are willing to wait several months, pay down their plastic, and do a few other things can see a reasonable improvement in their overall bureau ratings.
Here are five commonsense tactics that just about anyone can take
Pay Down Credit Cards
The trick to paying down card balances is cutting out excess fat from your monthly budget. Effective first steps include joining a wholesale club to buy groceries at a discount, selling some of your personal items in online auctions, and refinancing student loans. When you opt to refinance educational debt, you reap several benefits. Not only do you often get more time to pay and a lower interest rate, but a refi can mean lower monthly payments. That frees up cash for paying down those card balances.
Eliminate Negative Information
Obtain your bureau reports and examine them carefully. If they look unfamiliar, ask a consumer counselor or a loan department at your local bank to help you interpret the data. Make note of any derogatory marks like late or missed payments. If anything is in error, contact the company that reported the data and ask them to start a dispute process. Also, contact the bureau with a written record of your correspondence with the creditor. If the derogatory mark is correct, try fixing it by catching up on payments or paying off the amount in full.
Don’t Close Accounts
If you have several card accounts and have paid them all down to zero or close to zero balances, resist the urge to close them. Keeping accounts open shows your percentage of utilized credit as a very low number. That’s good for the purposes of your overall scores.
Use Automatic Bill Pay
To make sure you don’t miss car, mortgage, rent, utility, and other monthly payments, consider setting up all your routine expenses as auto-pay amounts with your preferred bank. Many people find this method a set it and forget it strategy for never missing a payment. That means you won’t have to worry about those nasty derogatory marks ever again. Just remember to keep enough cash in your account to cover all the automatic deductions. Late and missed payments are one of the three key factors that determine your overall bureau scores.
Don’t Apply for More Credit
The core component of your credit rating is the amount of available credit that you use. That’s why it’s important to pay cards down as much as possible, not close any accounts, and not apply for more credit. You don’t need any hard inquiries from potentially new creditors pulling your score down. Stick with the plastic you already have, minimize those balances, and don’t close out any accounts.