If you have had problems with debt or if you don’t have much credit,
chances are good that you are looking to improve your credit score. Improving
your score is a slow process, but it is worth it. Raising your score will
come in handy when you do need credit for a large purchase, like a house
or a vehicle. Additionally, raising your score will help you qualify for
better rates and may even help you get a better job. If you want to raise
your score, try any of these methods:
Pay Your Bills On Time
Your credit score is made up of five basic components that are each assigned
a certain weight. The most important part of the score, worth 35%, is
a person’s payment history. By far, the most important thing a person
can do to raise his or her credit scores is to pay all delinquent bills
and maintain a history of making payments on time.
Decrease The Amount of Credit Used
The second most important factor the credit utilization ratio. This ratio,
which is worth 30%, tells lenders how much of your credit you are currently
using. In general, the lower the ratio the better.
For example, suppose you have two credit cards, both with a credit limit
of $5,000. If you spend $4,000 on one credit card and $1,000 on the other,
you will have used 80% of your credit on the first card, 20% of your credit
on the second card, and 50% of your credit overall. Having too high of
either an overall credit ratio or a single card ratio can negatively affect
Correct Your Credit Report
In addition to changing the way you manage your credit, you should also
be sure to check for errors on your credit report. According to the Federal
Trade Commission, over 42 million Americans have inaccurate information
on their credit reports. While some of these errors are mundane, the FTC
classifies at least 2.2% of these errors to be “serious.”
While that may not seem like a lot, 2.2% of 42 million is at least 924,000
people currently living with serious credit report errors.
If you are concerned about your credit score, it is important to review
your credit report for errors at least once a year, and to report any
inaccurate information to the credit bureaus immediately. Doing so can
dramatically increase your credit scores.
For instance, in a follow-up study the FTC found that at least 1 in 5 Americans
had reported an error on their credit report to the credit bureaus. Of
these people, 20% reported that removing the inaccurate credit information
had resulted in an increased credit score and a decreased risk rating.
Help for Consumers
Taking control of your debt and your credit rating is an admirable goal.
At Loan Lawyers, our South Florida debt defense attorneys can help you
explore your legal alternatives, from debt negotiation and consolidation
to defending you in creditor lawsuits, defending you in foreclosure, or
filing for bankruptcy. To schedule your free consultation with Loan Lawyers,
contact our office today by calling (888) FIGHT-13 (344-4813).