If you are like many Americans who have a less than stellar credit-rating, you are probably looking for ways to raise your bureau scores. Here are four ways to get your scores moving in the right direction.
Raise Credit Score – Method One
Get copies of your reports from the three major reporting bureaus: Experian, Trans Union and Equifax. Next, carefully study the reports for incomplete, inaccurate, or unverifiable information. Write letters to the bureaus immediately to remove any incorrect information and be persistent in this process. Once this information is corrected your score will begin to rise.
Raise Credit Score – Method Two
By paying down your card debt you will start to move your score needle in a positive direction. Having too much card debt raises your debt to income ratio. The reporting agencies often check to find out whether you are paying more than the monthly minimum payments. Because the interest rates on deferred payment cards is extremely high, it can take forever to pay them off by minimum payments only.
Raise Credit Score – Method Three
Paying your bills on time is critical to having a good rating. Most people don't know this but 30% to 40% of your rating is based on your payment history. The reporting agency bureaus put heavier weight on more recent payment history than on your history from 4 or 5 years ago. Also, you should know that even one missed payment can reduce your rating by as much as 50 to 100 points.
Raise Credit Score – Method Four
Leaving open old card accounts that have been paid off can also help with your rating. It has been an incorrect axiom that consumers who have bad scores should pay off their cards, cut them up with scissors and close the accounts. Paying off the cards and cutting most of them up are good advice, but completely closing down these established accounts is poor advice.
By closing these accounts you are actually lowering your total monies available, which in turn makes your current card balances larger in score calculations. Also, when you close your established accounts a lender may find you less credit-worthy because you essentially have a shorter history.
Having a long track record of some involvement with a card company shows that you are able to mange your debts even if you only have small balances of charged items over a period of years. Keep an old card open and charge an item occasionally but make sure you pay off the amount at the end of the month. This will go a long way in improving your bureau scores in the long run.