To improve your credit score can seem like an impossible task. The scoring model seems to factor in tons of information and makes it seem as if you have no control over your score.
This is wrong. You can focus on a couple easy steps and develop a good credit score.
1. Disputing and removing bad credit items on your report. You can do this yourself or hire a service but it will help your score the most.
2. If you have a bad credit item verified or delinquent account then pay them. Work out a payment plan and have them remove the negative credit item in exchange for your payment.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
By paying your monthly bill you will develop a positive payment history. This is a heavily weighted factor when your score is being calculated. If your score is currently to low to get an unsecured credit card then open a secured card just make sure it reports to all three bureaus.
In addition by keeping your balance at approximately 10% of the credit limit it will build the most credit. This shows that you use your credit and use it responsibly.
5. Pay down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These five factors are the only things you need to concern yourself with when trying to improve your credit score. There is one last factor however it is shadowed in controversy.
6. Piggyback credit, this is when you are added as an authorized user to a good credit card account. The benefit is this account is now reported on your credit report.
This tactic has been widely abused by some credit repair services. The scoring model has changed to discount this method however it is disputed as to if that change has occurred or not.
In sum, focus on steps one through five and you are on your way to a 700 credit score. You don’t have to live with bad credit you can increase your score and your quality of life.
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