Credit Matters

Improving your credit score can seem like a daunting task. The credit bureaus claim to factor in hundreds of things and you have no direct control over your score.

Well they are wrong. No matter how bad your credit score is you can take a couple easy steps and improve it.

1. Disputing and removing bad credit items on your report. You can do this yourself or hire a service but it will help your score the most.

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. Pay your bills on time. It is estimated that missing a payment can damage a good score by up to 50 points.

4. Open a new line of credit. Your score will receive the most benefit if you have a revolving line of credit. We suggest 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 by keeping your balance at approximately 10% of the credit limit it will build the most credit. This shows that you use your credit and use it responsibly.

5. Pay off large debt. Your score will get a bump if you have high available credit to debt. The bureaus want to make sure you are not overextended and by showing them you have available credit your score will get a bump.

These are the five factors you should focus your efforts on. There is however one last factor that is surrounded by controversy.

6. Piggy back credit, this is when you are added as an authorized user on an account with a high credit limit and low balance. The benefit you get is the account is not reported on your credit history.

This tactic was widely abused and the scoring model has made some changes. It is said to have removed the benefit however it is debated as to if those changes have taken place yet.

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.