Damaged credit repair: 10 ways to improve credit score?

In this article I am going to show you the best ways to repair credit by using the top ten ways to improve credit score.

1. Make sure to check your credit report at least once a year.

This is a good way to make sure you’re not a victim of identity theft. You will be aware of what might be on your credit report so you can dispute the items that may be showing as incorrect or negative.

2. Dispute errors on your credit report.

Contact each of the three major credit bureaus – TransUnion, Equifax, and Experian – and get copies of your credit reports and credit scores.  Carefully read over the reports and note any errors.  In writing, contact the credit bureaus and ask that mistakes be removed or investigated.  This is called a dispute letter and once it is received, credit bureaus have to investigate your dispute within thirty days of receiving your letter.  It is important to keep a copy of your letter and it is important to note the date the letter was sent.  You should not be accusatory or abusive in your letter – calmly and clearly state the problem and request an investigation. This will raise credit score quickly.

 

 

3. Make sure to pay your bills on time all the time.

Your creditors will be compelled to report to the credit bureaus on time and correct information. This may seem like a simple step but it is the biggest obstacle to high credit scores. For example if you have a small credit card balance that requires a $15 dollar payment, don’t pay them $30 this month and nothing the next month because this will show as a 30 day late payment on that account.

4. Use half of the available credit line that’s outstanding.

How this works, if you have a credit line available of $1000 you should use no more than $450 to $500 as your credit limit. This is one of the biggest ways to improve your credit score.

5. Pay down your debts.

Make sure that you pay off all unnecessary outstanding debt each month to keep you in a better position to obtain further credit in the future. This will help to offset any new installment loans that you take out.

6. Leave open old lines of credit.

The credit bureaus scoring models seem to favor old revolving trade lines with low balances. This seems to raise credit score because it shows that you are stable in your credit use by not opening new trade lines all of the time.

that it is better to have old trade line set of instead wish for a long time left open even though you may not be using them as it will show a high credit to balance limit which will offend the sensually help to raise your credit score.

7. Pay off all outstanding collections and judgments.

The biggest way to improve your credit score if you have any outstanding collections or judgments is to make sure that you pay them off. You can negotiate a settlement with them instead of paying off the full amount. I’ve found a lot of times that creditors will settle for a 50¢ on the dollar for most collections and judgments that have been out there for the period of time. By paying those off you will be raising your credit score as it will be less derogatory items on your credit report. This may be one of the biggest things that you could do to raise your credit score.

8. Don’t think that having no loans or debts will improve your credit score

Some people believe that owing no money, having no credit cards, and in fact avoiding the whole world of credit will help improve their credit score.  The opposite is true – lenders want to see that you can handle credit, and the only way they can tell is if you have credit that you handle responsibly.

9. Be careful of inquiries on your credit report.

Every time that someone looks at your credit report, the inquiry is noted.  If you have lots of inquiries on your report, it may appear that you are shopping for several loans at once – or that you have been rejected by lenders.  Both make you appear a poor credit risk and may affect your credit score.  This means that you should be careful about who looks at your credit report. If you are shopping for a loan, shop around within a short period of time, since inquiries made within a few days of each other will generally be lumped together and counted as one inquiry.

10. Try secured credit if you cannot qualify for other types of credit.

Secured credit is credit or a loan which uses something as collateral.  In some cases, this could be an asset like a house.  In some cases, this collateral could be money frozen in an account by the bank for just such a purchase.

If you need credit following a big problem with your credit score, secured credit may be something you can qualify for. You can use this secured credit to reestablish a good credit rating so that you will qualify for other loans in the future.  You may have to pay slightly higher interest if your credit score is quite low, but in the long term repaying this type of loan is one more of the ways to improve your credit score.

Would you like further help on credit repair? click here.

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