A Few Simple Ways to Improve Your Credit Score
Banks are cracking down on would-be-homeowners with less than ideal credit scores, just as tough economic times make it harder to keep our scores up. What can the common person do? There ARE a few things that can legally be done in order to make sure your score improves.
First of all, there are many online services where you can get full credit reports from all three agencies. I tend to trust the sites ran by the reporting agencies themselves, they just seem more accurate and certainly give more detail. The best I have found is www.experian.com – it is not the cheapest, but you get a lot of detail and can even access a credit report simulator that shows the most probable effect on your credit score by taking a number of typical actions, such as bringing accounts current or adding new credit lines.
After you have your report, scrutinize it carefully for errors. You will be surprised at how many you find! For each error, you will need to write a letter to the offending agency (called a dispute letter) and describe what the error is. If you just don’t have time to do this, there are a lot of agencies out there who will be persistent and write these letters for you. Just be careful and choose wisely – the BBB gets complaints about “fake” credit repair agencies every day! Read reviews on each agency, and talk to the actual personnel before you sign up or pay any fees.
Next, to make sure all your bills are paid on time – set up an automated bill pay service such as the free one offered by Bank of America, or through Quicken. Make sure your bills are all mailed five days before they are due.
It goes without saying that paying off any balance overages and keeping credit cards to a manageable number will help, and so does sending a little bit out over the minimum balance on each card so you show that you are making progress.
Avoid schemes where you add someone with good credit as a signer on your accounts in exchange for payment, this is not only unethical (unless you know the person and they want to help you out), but is soon to become illegal. Also, anyone who claims to be able to remove legitimate bad debt probably also falls into the scammer category, and is best avoided.
If you have no credit or very bad credit, one way that you can build your score even if you are turned down for all credit cards is to get a secured card in which you deposit a certain sum of money. These cards usually carry a fee, but do help reestablish credit after tough times. Use it wisely, and replenish the card’s capital every month.
