Banks are looking certain things, learn in Credit Score 101, how to improve your FICO score and the three essential things you can do right now to make improvements.
How to repair credit and improve a FICO Score
Rebuilding bad credit is like losing weight: It takes time, and there is no quick fix. And we all know quick-fixes backfire, so beware of any advice that claims to improve your credit score fast. The best information we can provide is to manage credit responsibly and over time. If you haven't, then you need to repair your history before you see improvement. These tips will help you. Below you will find categories based on data used to calculate your credit score.
Things You Can Do Now
1. Check Your Credit Report – Begin with your credit report, start by requesting a copy of your credit report. Your credit report contains data used to calculate your credit score, and most likely contains errors. Check for late payments incorrectly listed and that the amounts owed for each of your open statements. If you find an error, dispute the mistake. Read more about Disputing Errors on Your Credit Report
2. Setup Payment Reminders – Making your payments on time is one of the most significant factors used to calculate your score. Use your online banking portals to pay automatically or to arrange an email or text message reminder.
3. Reduce the Debt You Owe – Reducing the amount you owe is an achievement that will drastically improve your credit score. Start by stopping! Stop using your credit cards. List your accounts and check statements to see how much you owe and what interest rate you are being charged. Put your earnings towards the highest interest cards first, while maintaining minimum payments on your lower interest accounts.
How to Fix a Credit Score and Maintain Good Credit Payment History
- Pay your bills on time. Delinquent payments and collections have an adverse impact on your FICO Score.
- If you miss payments, get current and stay current. Pay your bills on time. Older credit problems from off so poor credit performance does not haunt you forever. Your past credit problems fade as time passes and your more recent good payment patterns do make a difference. Display positive payment history to show you are managing your credit well.
- Paying off a collection account will not remove it from your credit report. All accounts turned over to collections stay on your report for seven years. Avoid them if possible.
- See a legitimate credit counselor. Doing this does not rebuild your credit score immediately, but they teach you how to manage your credit and the importance of paying on time. Your score will increase over time with good habits. Note: receiving advice from a credit counseling service will not hurt your FICO Score.
- Keep tabs on your credit rating. Requirements can change without notice, stay on top of your score.
Fiscal responsibility is NOT something we are taught in school, and our parents did not have to tools we have at our disposal. Monitor and improve your credit score so when a bank or anyone else does take a look at you they see a high credit score.