If you’re like most people, the recession took a toll on your finances, and probably your credit score. So how do you get it back to where it needs to be? While it usually takes 7 years for any negative marks to be removed from your credit report, there are a couple quick and simple ways to you can raise your credit score now. Here are a couple to keep in mind.
1. Keep paying things on time: The most important thing to remember is to keep your credit report clean from here on out. Pay your bills on time. Make sure you aren’t over your limit on any of your credit cards. Keep the balances on your credit cards low. Keeping your finances clean is the best way to raise your score.
2. Don’t cancel any of your credit cards: This may seem counterintuitive, but canceling credit cards actually lowers your credit score. Part of your credit score is based on how much credit you utilize (your credit utilization score), so the more credit you have available, the higher your credit score. If you cancel a credit card, you no longer have that credit available, which lowers your credit utilization score, which in turn lowers your credit score. Even if you’ve paid off a credit card, keep it open and gather up the extra points you get from having that extra line of credit.
3. Open the lines of communication with your credit card lenders: If a bunch of credit card debt is keeping your credit score down, talk with your credit card lenders to see if you can strike a deal to pay off that debt. Many lenders are open to making deals with you, since all they are really after is the money you owe. Just remember, if you do make a deal with a lender, ask them how they will be reporting it to the credit bureaus. They have two options: “Paying as agreed,” which won’t hurt your credit score, or “not paying as agreed,” which could bring your credit score down. Make sure they are reporting it as “paying as agreed” before you agree to any deal.
4. Sign up for a secured credit card: If your credit is so bad that you keep getting denied for a credit card or loan, try signing up for a secured credit card. Since you put down a deposit for a secured credit card, it doesn’t matter how bad your credit is, secured credit cards are available for everyone. Just make sure to apply for a card that reports to all 3 credit bureaus, otherwise having the extra line of credit won’t affect your credit score. This card reports to all 3 credit bureaus and has a low annual fee.
5. Make sure there are no mistakes on your credit report: More than 42 million people in this country have errors on their credit report, and 10 million of those have errors that affect their credit score. Make sure you are regularly checking your credit report to make sure there are no mistakes and that you haven’t been a victim of identity theft. Fixing simple mistakes on your credit report can be a quick way to boost your score. If you are looking for a good credit report monitoring service, we did some research on the best ones.
Keep in mind, the only guaranteed way to raise your credit score is to wait until negative information expires from your credit report, which takes 7 years (some bankruptcies take 10 years.) Keep paying your bills on time and keep your credit utilization rate as high as possible and you should see a difference in your credit score with patience and time.