When you see those advertisements that say you can fix your own credit it's understandable that you're skeptical, but there is some small grains of truth to them - there are some things that you can do to make your credit better on your own. That will help you raise your credit score and will work to your advantage when you try to get a loan in the future, but you have to be willing to put in the work. Step one is to know what's on your credit report and why it's there, because it's pretty hard to fix something or improve upon it if you don't have any starting point for it.
Step two is to look at your credit reports (TransUnion, Experian, and Equifax all offer them, so get one from all three bureaus, since they can be different depending on how a company you've had dealings with reports things) and compare them to see if they match up. If you find that they don't all match like they should, some of the problem with your credit could be that there are things on your credit report that don't match with what's true and accurate regarding your credit history. When you find things like this you should contact the credit bureau and ask to have them remove those items, which they will do if they investigate and find that those items aren't yours -they are obligated to investigate any legitimate claim that's not obviously frivolous - and once the items are removed they'll send you a corrected credit report.
In step three, you'll want to count up the open, active accounts that you currently have and see that you have at least three, since that's how many you need to have a good credit score. It's hard to tell how responsible you are with your credit if you only have one or two open accounts, and if you have three to five it's much easier to see what you've been doing with your credit, especially if those accounts are varied (like vehicle loans or a mortgage) and not all credit cards. You can get more accounts if you don't have enough, but you'll have to be careful how you do this, since just running out and applying for more credit cards can actually really hurt your credit score.
For step four you'll need a willing helper, and someone who already has good credit, because you're going to ask that person to add you to his or her credit card as an authorized user - with a caveat. You won't get a card and you won't be allowed to actually use the credit, but the length and quality of the credit that goes with that card will be placed on your credit report, as well. Do this only for a credit card that the person has had for a couple of years and that there haven't been any late payments or other problems with, since you don't want those bad things transferred over to your credit report.
Step five starts into the harder things, like paying down your debt, since having a high balance on your credit accounts makes you look as though you're not responsible with credit - and it will harm your credit score. When you start paying down balances, focus on getting them down below 50% of what you're allowed to borrow on the credit card, and from that point work to get them down to 30% of what you owe and make sure that they stay below that level, because when you do that you'll show that you are being responsible with your credit. You'll have a much better chance of getting future credit that you might need if you can show that the balances on your cards are low and that they are staying low, so it's something worth concentrating on, since it shows that you're taking good care of your credit.
Step six is to let those paid-off, open credit card accounts stay open, and don't close them out just because you've paid them off. When you close out accounts they drop off of your credit report after seven years, so you'll stop getting 'good credit' points for them, and you don't want to do that. Some accounts like car loans and mortgages do that automatically, but credit cards will stay open as long as you don't close them and you use them occasionally, so be sure to keep your credit strong by doing that.
Step seven is the easiest one: maintain what you've done and are doing to keep your credit score high by making sure things get paid on time. Don't start adding up a bunch of new debt once you've gotten rid of the old debt, and you'll soon see that your credit score will stay high, allowing you to get the credit that you need when you need it. If you only get and use credit when you need it, and you don't overextend yourself, you'll have a much better chance of keeping a great credit score for years to come and being able to buy what you need without worrying that you won't qualify for any kind of low-interest credit.
Step two is to look at your credit reports (TransUnion, Experian, and Equifax all offer them, so get one from all three bureaus, since they can be different depending on how a company you've had dealings with reports things) and compare them to see if they match up. If you find that they don't all match like they should, some of the problem with your credit could be that there are things on your credit report that don't match with what's true and accurate regarding your credit history. When you find things like this you should contact the credit bureau and ask to have them remove those items, which they will do if they investigate and find that those items aren't yours -they are obligated to investigate any legitimate claim that's not obviously frivolous - and once the items are removed they'll send you a corrected credit report.
In step three, you'll want to count up the open, active accounts that you currently have and see that you have at least three, since that's how many you need to have a good credit score. It's hard to tell how responsible you are with your credit if you only have one or two open accounts, and if you have three to five it's much easier to see what you've been doing with your credit, especially if those accounts are varied (like vehicle loans or a mortgage) and not all credit cards. You can get more accounts if you don't have enough, but you'll have to be careful how you do this, since just running out and applying for more credit cards can actually really hurt your credit score.
For step four you'll need a willing helper, and someone who already has good credit, because you're going to ask that person to add you to his or her credit card as an authorized user - with a caveat. You won't get a card and you won't be allowed to actually use the credit, but the length and quality of the credit that goes with that card will be placed on your credit report, as well. Do this only for a credit card that the person has had for a couple of years and that there haven't been any late payments or other problems with, since you don't want those bad things transferred over to your credit report.
Step five starts into the harder things, like paying down your debt, since having a high balance on your credit accounts makes you look as though you're not responsible with credit - and it will harm your credit score. When you start paying down balances, focus on getting them down below 50% of what you're allowed to borrow on the credit card, and from that point work to get them down to 30% of what you owe and make sure that they stay below that level, because when you do that you'll show that you are being responsible with your credit. You'll have a much better chance of getting future credit that you might need if you can show that the balances on your cards are low and that they are staying low, so it's something worth concentrating on, since it shows that you're taking good care of your credit.
Step six is to let those paid-off, open credit card accounts stay open, and don't close them out just because you've paid them off. When you close out accounts they drop off of your credit report after seven years, so you'll stop getting 'good credit' points for them, and you don't want to do that. Some accounts like car loans and mortgages do that automatically, but credit cards will stay open as long as you don't close them and you use them occasionally, so be sure to keep your credit strong by doing that.
Step seven is the easiest one: maintain what you've done and are doing to keep your credit score high by making sure things get paid on time. Don't start adding up a bunch of new debt once you've gotten rid of the old debt, and you'll soon see that your credit score will stay high, allowing you to get the credit that you need when you need it. If you only get and use credit when you need it, and you don't overextend yourself, you'll have a much better chance of keeping a great credit score for years to come and being able to buy what you need without worrying that you won't qualify for any kind of low-interest credit.
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