Looking for ways to improve an unfavorable credit score? Look no further! Our handy guide will help you get on the road to improving your score.
Do: Determine your actual credit score
If a recent credit application of yours has been denied, find out why. Each of the three major credit reporting agencies are required to provide you with a complimentary copy of your credit report once a year, upon request. To order yours, visit annualcreditreport.com. You are also entitled to a copy if an adverse action like this happens – as long as you request it within 60 days of the notice.
Do: Review your report and dispute errors
If you spot erroneous information on your credit report, dispute it in writing. Clearly identify every item you are disputing and the reasoning. Include copies of documents that support your stance and ask that the errors be corrected. Send it by certified mail and keep a personal copy of your entire letter for your own records.You’ll also want to dispute the charge with your actual creditor.
Don’t: Expect quick fixes
There is no “quick fix” for creditworthiness. If a credit repair company promises to increase your score by 100 points in less than a month, don’t believe it. There are legitimate credit repair companies, but there’s nothing they can do for you that you can’t do on your own.
Do: Take steps toward fixing your credit
Once you’ve determined that your credit report is accurate, take a careful look at which habits are generating the unfavorable score.
If you’re consistently late with credit card payments, consider setting up automatic bill-pay so you’re never late. If your debt isn’t going anywhere, rethink your spending habits. Trim your expenses wherever possible and never shop with credit cards. If your debt has become unmanageable, consider debt consolidation or a balance transfer to a card that has an interest-free period. Lots of open credit is considered unfavorable by creditors, so close as many accounts as you open – but leave your oldest one open. You can also consider contacting creditors to work out a more reasonable payment plan. Finally, find ways to increase your income, using all extra cash exclusively for paying down debt.
Don’t: Expect to see improvement immediately
It may take upward of 30 days or more for your account to be updated and your score to improve.
Do: Ask us for help
Here at SIU Credit Union, we’re all about helping you manage your finances. If you’re in financial trouble of any kind, stop by today to ask about our credit counseling services and assistance with creating and sticking to a budget. Here are some financial calculators to help. We even offer debt consolidation loans, providing you with the opportunity to transfer your debt to one low-interest loan, making the prospect of paying down your debt a lot more manageable.
Your Turn: Have you drastically improved your credit score? What was your secret weapon? Share your success and best tips with us in the comments!