How To Improve Credit Score
To improve your credit score can seem like an impossible task. The scoring model seems to factor in tons of information and makes it seem as if you have no control over your score.
This is wrong. You can focus on a couple easy steps and develop a good credit score.
1. Remove bad credit items on your report. You must dispute the credit bureaus directly with either a dispute letter or by hiring a service to dispute them on your behalf.
2. If you have a bad credit item verified or delinquent account then pay them. Work out a payment plan and have them remove the negative credit item in exchange for your payment.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new credit line. This is best if it is a revolving line of credit, for example an unsecured credit card.
When you make your monthly payment you will be creating a positive payment history. This is a very large part of your credit score. If you have difficulties opening an unsecured credit card then get a secured card. Double check and make sure your credit card is reported to all three major bureaus.
In addition try to keep your monthly balance at 10% of your available credit. Doing this shows the bureaus that you do in fact use your credit and you use it responsibly.
5. Pay down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These are the five factors you should focus your efforts on. There is however one last factor that is surrounded by controversy.
6. Piggyback credit, this is when you are added as an authorized user to a good credit card account. The benefit is this account is now reported on your credit report.
This tactic has been widely abused and the scoring model has adjusted its formula to discount authorized users. However there is a debate over if this change has occurred yet or not.
In sum if you can take care of steps one through five then you will improve your score. With a high credit score your quality of life will also improve.