10 Tips To Improve Your Credit Score - By Kristy M Lopez


I am in the process of purchasing a house and I can say that the process hasn't exactly been an easy one, even though I am working with some awesome women to help me through this process. The first, and biggest, thing I had to do was get my credit under control. Here are 10 tips I have learned along the way about how to improve your credit score fast so that you can qualify to receive a home loan.

Know Where You Are And Where You Need To Be - there are many services available for you to pull your credit score and report without hurting your credit score. Find out where your credit score is currently and where it needs to be. Then, make a plan to get there.

Errors, Erroneous Accounts, Etc. - there may be errors on your credit reports, such as accounts that aren't yours, accounts that show late payments when the payments were made on time, debts that you know you paid off but haven't been reported to the credit agencies, etc. And, instead of contacting the credit agencies directly (unless you have several months to get things fixed), I recommend contacting the companies directly to re-report the correct information to the credit agencies. 

Pay Down Credit Cards - these are evil little pieces of plastic that eat up your money faster than you can make it (in most cases). Make a list of your credit cards, the balance, the credit limit, and the APR. You can either pay off the lowest balance first, or you can start with the card with the highest APR. If you pay down your credit cards substantially over a couple of months, you can boost your credit score significantly, and quickly.

Do Not Close Accounts - When you cancel a credit card your credit score takes a hit. Once you pay down / off a credit card, specifically ask the credit company to report this to the credit agencies (they generally only report once a month). 

Closing Accounts - if you must close an account be sure to close the newest accounts first and leave the oldest accounts open. The longer you have had the account, the farther back your credit history goes.

Credit Card Balances - if you have a couple of cards that are nearing being maxed out, but a couple that are open already, but have extremely low (or none) balances, then transfer some of the balance from the larger cards to the other cards. This will even out your credit card balances and usage and increase your credit score.

Student Loans - I found out very quickly that my student loans showed a minimum payment that was way too high, and I had an 'extra' student loan balance showing on my credit report that was a duplicate. Instead of contacting the credit agencies to dispute these items, I simply contacted the student loan company and asked them to fix the situation. I received a letter from them stating that there was an error made on my credit report, what the error was, and that they have requested the credit agencies to fix the issue. I am able to turn that letter over to the lending company so that if it is not fixed timely (credit agencies don't work very fast from what I have experienced), they can take that into consideration when looking at your credit report and score (and there's no 'disputes' showing on the credit report, which is good). 

Pay On Time - if you have had late payments in the past, start paying all of your bills on time and don't miss a single payment. This will improve your credit score.

Do Not Apply For More Credit - while you might want to refinance your car, take out a small personal loan, or open a new credit card... don't do it. Every time you apply for credit of any kind the company will pull your credit report and this will mean that your credit score will take a hit, whether or not you are approved. 

Bankruptcies - bankruptcies should only stay on your credit report for 10 years. If, after 10 years, it has not been removed, then send a letter to the credit agency(s) requesting that it be removed promptly. The same is true with debt that was included in your bankruptcy.

Have you recently increased your credit score? How did you do it?

 

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