Improving Your Credit Report

Credit is something that some take lightly or give little thought to until it’s really needed. There are steps you can do to take to improve your credit report.

Pay your bills on time

A consistent history of timely payments will greatly improve your credit profile. This will make you more desirable to lenders. In many cases, a strong payment history in your credit reports will also result in better interest rates.

Pay your bill in full every month

This will help to save you money in finance charges, especially credit cards with high interest rates, and will make your credit reports even stronger.

Avoid a Balance

Avoid carrying a balance of more than 50% of your total credit limit on any credit card.

Report Errors

If you notice any incorrect information on your credit reports, dispute it in writing with the credit bureau immediately. You may also find it helpful to contact the creditor directly. Notify them of the incorrect information and ask that they correct it on your credit report.

Rebuild Your Credit

If you have recently filed for bankruptcy, start rebuilding your credit with a secured credit card. There are even unsecured, bankruptcy friendly cards. A quick google search can provide options. The latter often requires higher interest be paid, but your credit score will begin to rise after three months of a steady payment history.

Make Sure Closed Accounts Are Closed

If you have old accounts that are listed as being open, but are actually closed, call the creditor and send a letter to the credit bureau. Often times, creditors simply never report an account as being closed with the credit bureaus. If you have a lot of available credit on your report, potential lenders may wonder why you need all of this open credit.. A large number of apparently open accounts with a zero balance may put you in the high risk loan category. Lenders can suspect that you plan to increase your debt load substantially with your unused credit.

Don’t Apply to Often

Avoid excessively applying for credit as this may lower your credit score because of multiple inquiries.

Don’t Overcharge

Use your credit cards for necessities only and avoid spending more than you could repay within six months.

Reduce Your Available Credit

If your credit cards have high credit limits that you never plan to use, ask that they reduce your credit limit. This will not only reduce the temptation of overspending. It will also prevent potential lenders from seeing that you have a lot of available credit and suspecting that you plan to go into serious debt.

Review Annually

The best way to improve your credit report is to review the information filed with each of the three major credit bureaus at least every year. These include TransUnion, Experian and Equifax. A free copy of credit reports can be obtained every 12 months.