A good credit score indicates financial responsibility, which can improve your odds of getting approved for low-interest loans or credit opportunities. Whether you’re working to rebuild your credit or starting from scratch, excellent credit scores might seem like an unattainable goal. However, understanding what affects your score is the first step towards improvement. Follow the credit repair guide below to boost your score.
A Guide to Increasing Your Credit Score
1. Request a Credit Report Annually
If you’re wondering what factors are affecting your credit, your credit reports are a good place to start. Every year, you are entitled to one free credit report from each of the top reporting agencies: TransUnion, Experian, and Equifax. You can request your report through their jointly operated website. Review each one to see what is helping or hurting your score and to dispute any errors you find, such as a wrong address or accounts incorrectly reported as unpaid and delinquent.
2. Make Payments on Time
Many factors affect your credit score, but payment history has the greatest influence. Avoiding late payments will help you achieve better credit. Create an organized system to keep track of upcoming bills, set an alert on your phone for due dates, and enroll in automatic bill payments when possible.
3. Limit New Accounts
Having multiple accounts that report to credit bureaus is essential for building credit, but you should limit how frequently you apply for new forms of credit. Applications for new credit cards, mortgages, auto loans, and other accounts often require a hard inquiry. Several hard inquiries in a short period of time can damage your score.
4. Consider Debt Consolidation
It may be beneficial for those with multiple debts to enroll in a debt consolidation program. This leaves you with just one payment to handle, and you may be able to get a lower interest rate. Consolidating debts may cause a temporary dip in your credit score, but as long as you are able to make payments on time, you can expect your credit repair to come quickly. You may even be able to pay down your debt faster.
5. Maintain a Good Credit Utilization Rate
There is a maximum amount you can spend on your revolving credit accounts. Credit utilization, the portion of the credit limit you’re using, is the second most important determining factor for your credit score. The key is to maintain a low balance on credit cards and lines of credit relative to your credit limits. Ideally, your credit utilization rate should not exceed 30% of your limit.
Credit score repairs can be challenging, but the experts at Financial Rejoice will set you on the right path. Based in Chicago, IL, these financial advisors will personally analyze your credit history to work out an improvement plan. Their plans give you access to valuable resources, including credit intervention, online score monitoring, goodwill letters, and unlimited disputes. Visit their website for detailed explanations of their services and call (888) 230-3718 today to get started.