5 steps to boost credit scores
Many New Year’s resolutions were made to reduce debt and improve financial stability, but now people have to figure out how to make the resolutions happen. An improved credit score is possible in 5 steps that many consumers forget to take.
One of the most important thing customers need to do before making changes is to evaluate their credit score. Consumers are legally entitled to three credit reports each year, one from each of the three major credit bureaus. Consumers should check their credit report every four months to check for any errors or surprises.
The next step is to dispute any negative credit reports that aren’t accurate. Some common mistakes include collection agency misreports when consumers have similar names. If you do not recognize an account, call to find out details and if necessary, file a dispute.
A third step is to utilize credit accounts wisely. Credit bureaus take into account the amount of credit utilized compared to the amount of credit available. If one card carries a very high balance compared to the available balance a credit score might be hurt. Check balance transfer fees first, but then balance the amount of credit so that each account carries a low balance that can be paid off quickly.
Using credit cards for regular bill payments is a fourth way to increase a credit score. Credit card companies report 2 years of activity and an inactive card can actually hurt a credit score. Simply charging one regular bill to an account and paying the balance off in full each month can dramatically increase a credit score.
The fifth step towards raising a credit score is to contact credit card issuers to ask for adjustments or help if needed. Missed payments hurt credit scores but some people are unable to make minimum payments. The sooner the credit company is contacted the sooner a plan can be set in place to make payments towards lowering the debt. Most credit companies will be flexible with minimum payments so that the consumers can stay current on accounts.
