Having a low credit score could have negative impacts on your life. Low credit scores stand in the way of getting loans, establishing better lines of credit, and could even keep you from getting that dream job. If you have a low credit score, how can you get a credit score increase?
The first thing to do is to get a copy of your credit score report. By going over it carefully you could find errors that can be corrected and immediately give you a credit score increase. By writing a letter disputing the error you can have it removed from your credit score and if you have documentation proving it, it will take less time. When reporting a discrepancy, it’s important that your write all three credit bureaus, Transunion, Experian, and Equifax, to be sure the change is made to all three. If you are denied you can keep writing, sometimes the bureau will change its mind.
Once all errors are removed, go through and see what you owe. Start paying off the balances. While it may seem to be smarter to pay the lower balances first, since you’ll pay those off quicker, you should start with high balances first. One factor of your credit score is how much you owe versus how much credit you have. So eliminating high balances first will increase the amount of credit you have available, decrease the amount you are in debt, and increase your credit score.
Another thing to do is to apply for a secured credit card. A secured credit card is one issued based on an account you’ve deposited money in. So if you’ve deposited $500 into the account, you have $500 worth of credit on that card. This could be a good way to build a better credit history. However, be careful doing this as some banks try to take advantage of their customers by making unreasonable demands. Shop around a little and check out the terms of several places to get a secured credit card.
Make your payments on time. If you run late on a payment, try to get it in within thirty days. You will still see a dip in your credit score, but if you want until after thirty days that dip can become a chasm as your credit score drops up to one hundred points. If you keep making payments on time, you will note a credit score increase. You appear to be responsible and that equals a good credit risk.
Avoid applying for multiple lines of credit, especially all at once. This sends up a red flag to creditors and they will be afraid you can’t make the payments. If you can, stick to any current credit cards you have. Long term credit cards you’ve been maintaining are a good way to keep your credit score higher. Closing that account removes a positive report and applying for a lower interest card incurs a negative rating. When looking for a credit increase you want to keep the long term card, which shows positive long term financial responsibility. That can be more important than lower interest rates.
There are many simple methods to get a credit score increase, and once you have done those, you can move on to more advanced methods of raising your credit score.