Many people take great pride in having a credit score in the upper 700s as if it reflects the type of person they are. Your credit score says a lot about what type of spender you are and most importantly, how well you pay your bills. Although it can’t claim to reflect if you are a good friend, neighbor, husband or son, you are judged by it nonetheless. With your integrity riding on these three little numbers, it makes sense to know a little bit about how to guard them.
If you have limited access to the world, live on a farm and eat your own produce you might not need to bother with this thing called a credit score. You may need to right your own article or book to help others reach this heighten awareness. However, if you are like the mass majority, having a good credit score makes life a little easier.
Putting it in Perspective
A great credit score won’t improve your marriage, mend a broken heart or replace a good friend. However, living in the credit based United States, having a good score will help you get a better interest rate on your car insurance, help you land a dream job that you ARE qualified for and allow you to be approved for that condo that you’ve always wanted. A good credit score will also give you financial backing if you should ever need it.
How to Improve Your Credit Score
It may be easier to ensure that your score don’t drop than it is to improve it. With that being said, the actions that you take for this point forward will determine if you will improve your credit score or not. Many of these actions are obvious to most but still bare reinforcing.
- First, know that the worse credit score can be improved. Don’t take a defeatist attitude because that won’t help you or your score.
- Secondly, request a duplicate of your credit report from the reporting agencies—Trans Union, Equifax, and Experian. You are entitled by law to a free report every year. If you were recently denied credit, you can also request a free credit report from the reporting agency.
- Check for any errors on your report and dispute them in writing. Send a copy of the credit report to the reporting agency with the error(s) highlighted. Check back with a phone call in about three weeks to check the status of your dispute and any actions taken.
- Make up with your creditors. Communication is critical because they can’t help if they don’t know what the problem is. Ask for a payment arrangement that you can stick to and keep it. This will stop them from reporting you as delinquent and brings your accounts current.
- Your payment history weighs heavily on your credit score (35%) so make it a priority to pay your bills on time every month.
- How much debt owed is 30% of your score. So, pay down those debts as soon as possible. You want to have less debt owed. Don’t be so quick to open up new accounts this works against your credit score.
- Work with the credit you already have. How long you’ve had your open accounts looks more favorable than paying them off and closing them. So pay off the oldest ones and keep them open.
- Know that even though you have paid off a bad debt it still stays on your credit report for seven years—however, it does show as paid.
Let’s face it, rejection of any kind hurts. Being turned down for employment stings even more. You can take the necessary steps to improve your score and your confidence. Don’t beat yourself up. Get back on that horse. Learn as much as you can. When it comes to your credit report and credit score, become an expert. It may take a little more effort in the beginning but it will get easier and it will be worth it.