9 Ways To Improve Your Credit Score Or Establish Credit History

You are lucky if you are not in any debt or your credit card debt is under control. This means you have chance and time to improve your credit score or establish your credit history.

As for me, I am sure that my credit score may have been damaged badly by all those late payments way before enrolling in a debt management program.

It’s true that a debt management program helps you pay off debt, but it also hurts your credit report at the same time. Usually, a comment is added to your credit report that you are using a credit management agency to help you pay off your account.

This particular comment will remain until your account is paid in full. You can only qualify for new credit provided your debt is fully settled.

Since you are not in debt or your credit card debt is under control, it’s wise for you to try to shore up your credit score. Having a good credit rating helps you reduce your payments, interest rates, and fees.

Here are 9 Ways to Improve Your Credit Score:

1. Pay your bills on time. Default payments and collections can cause a major impact on your credit history.

2. If you missed a payment, get current and stay current. The longer you pay your bills on time, the better your credit history.

3. Be aware that paying off a collection account or closing an account on which you previously missed a payment, will not remove it from your credit report.

4. If you are having difficulty making payments, contact your creditor or see a credit counselor. This won’t immediately improve your credit history, but if you can begin to manage your credit and pay on time, your credit history will improve over time.

5. Keep balances low on credit cards and other “revolving credit.” Ideally, keeping your balance below 30% of the allowable credit gives you’re the best credit history, but even below 50% helps.

6. Pay off debt rather than moving it around. Set up a plan to pay off debt, this means stop using it and make more than the minimum payment if possible.

7. Don’t close unused credit cards as a short term strategy. Closing unused credit accounts that show zero balances and that are in good standing will not improve your credit history.

8. Avoid credit repair agencies that charge a fee to improve your credit score by removing negative, but accurate information from your credit report. No one can force credit reporting agencies to remove accurate information.

9. If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly.

Source: ABC15.com