How to improve your credit score

A good credit score is a strong indicator to potential lenders, employers, and landlords that you are fiscally responsible and reliable. In order to improve your credit score, there are a number of steps that you can take.

Making sense of your credit report

It is important to know and understand your credit report, which differs from a credit score. A credit report reflects your current credit, in addition to any credit you have used previously. A credit report will also show if you have ever been sued, had accounts go into collection, or filed for bankruptcy. Experian, TransUnion, and Equifax, the three main reporting agencies, offer one free credit report each year.

Advantages of a higher credit score

You will enjoy a number of advantages with a higher credit score. Since most landlords require a 620 credit score in order to rent an apartment, your ability to obtain housing could be impacted by a low score. You will also be eligible for lower interest when buying a car if you have a higher credit score.

How to improve your credit score

It is important to confirm that all the accounts listed are actually yours when you review your credit score. If you find an account that is not, in fact, yours, it is possible that this is the result of identity theft. You should immediately contact The Consumer Protection Department for a free dispute letter.

Your next step would be to contact the reporting bureaus so that you can dispute the erroneous information. You should also send a copy of the original document to provide evidence. If you identify clearly by circling the error, you can speed up the investigation. It could take up to 30 days for the issue to be resolved, and you should keep copies of every correspondence sent.

Settle debts for lower amount

It is important to keep your income ratio low in order to keep a lower credit score. This means that you are paying off more than you are spending. You can seek assistance from a number of companies that are willing to help you lower your overall amount.

Pay your bills on time

Potential lenders, employers, and landlords will want to know if you pay your bills on time, and this will be one of the first things they check. Their decisions can be impacted by even one late payment. Being sure to pay on time can help increase your credit score. The Snowball Method and picking up a side job are two ways to help you achieve this goal.

Be smart with your credit cards

It is important to use your credit cards responsibly. Your good credit score could be jeopardized by your overuse of the card. You must be sure to pay on time, pay down current debt, and reduce the use of existing credit. You should pay off your card and then contact the company to negotiate your rates. If they are unable to give you a better interest, you need to cancel the card. It is also recommended getting an introductory zero interest rate offer to use as a balance transfer. You can then transfer a higher balance from an existing card onto this one. Doing so will improve your credit score.