The credit score is one of the most essential numbers that you will encounter within your personal banking history. There are aspects that can increase the score and aspects that can decrease the score. Specific activities such as allowing accounts to go to collections and failing to repay debts on time each month as well as bankruptcy can contribute to a negative score. Once a negative score has been established, it can be difficult to establish and increase the rating. Although repair is difficult, it is important to remember that it is not impossible.
Here are some five ways that you can rebuild the rating:
Make amends with credit card companies and other debts and begin to repay debts on time. Starting from this point forward you can begin to increase your rating by repaying your bills on time each month. This way, from this point forward you can create a positive banking history. Starting from this point forward paying the bills on time each month can reflect positively on the score.
Negotiate with creditors to remove collection accounts from the report. Many debtors are unaware that you can indeed negotiate with creditors to remove the strike from the report upon the completion of payment to the credit collection agency. This act can increase the rating almost immediately as collection accounts can deplete the report.
Apply for a secured credit card. A secured card is an effective way to rebuild the rating and will require that the individual place a deposit towards the account to secure the credit limit which is being granted to the card holder. Secured credit card companies report to three of the major credit reporting agencies monthly and therefore in as little as six months you can begin to see an improvement in your rating.
Repay debts that have been accumulated. Many consumers are unaware that a balance of more than thirty percent of their limit can be detrimental to the score and increase the appearance of risk to potential lenders. Repaying debts and ensuring that the limits are below 30% of the total credit limit is an effective way to increase the credit rating.
Reduce the amount of new credit that is applied for and maintain the long standing accounts that have developed good history towards the score. These two methods can help to keep your credit score in check and increase the score in the case that it has been dwindling due to a lack of control over the finances.
Using these methods the credit repair process can begin. Obtaining a copy of the credit report is the first step to maintaining your financial health. Removing any mistakes from the credit report and taking these measures will enable the consumer to make the most of their score and ensure that it is up to par before applying for credit services.