How to Improve Your Credit Score

HAVING GREAT CREDIT IS MORE IMPORTANT THAN EVER.
BUT WHY WORK WITH US?

BUT WHY WORK WITH US?

If you recently received a report with a low rating or would like to apply for a loan with more favorable interest rates, we can help. New Credit Law’s guide on how to improve your credit score is a great resource to help get your credit back on track. However, there are a few basic things you can do to help your credit rating all on your own. Following the general advice below will help aid in fixing your credit and improving your overall standing. It’s important to keep in mind that improving your score depends on various factors and is a process that does not happen overnight.

Figure Out Your Current Standing

If you have yet to inquire about your current score, this is an important first step. The good news is you may pull your reports free once each year. The three main reporting agencies (Equifax, TransUnion, Experian) pull your average and each may vary slightly. Your Fico score will be the only exact score. By pulling these, you can identify what is negatively affecting your score. Address these issues first, as they will be the heavy hitters in improving your credit.

Revolving Credit

Keeping revolving credit, such as your credit cards, on the lower end of debt with consistent payments will help improve your score. Additionally, refrain from opening multiple cards for more credit limits or closing unused cards that have no annual fees. Each of these can affect your score and you should only do them with proper research.

Pay Bills on Time

Lenders who are pulling your report will look into how quickly you pay your bills. This is a good indicator of how risky your loan application will be. Setting up automatic payments or reminders for due dates will ensure you pay your phone, rent, credit card, and more on time. Delinquent payments can sit in your report for several years, paying them as soon as possible will help decline their impact.

Collections

You should address any accounts that went to a collection agency as soon as possible. Accounts in collections heavily impact your credit score in a negative manner, so addressing these debts sooner than later is important. Sometimes you can work out settlements with the collection agency for a lump sum that is usually less than the debited amount. Before settling debts in collections for a lesser sum, research or consult a professional to assure you are positively addressing your account.

Limited Credit

Poor credit can arise out of having no credit or too few accounts. If you can’t apply for a reasonable interest rate with a credit card company, build your credit by applying for a secured card. This will limit what you can spend while building your credit through consistent payments. It may also evolve into a legitimate card over time depending on the company.