Monitoring your credit score, especially if it has taken a hit, can cause a significant amount of anxiety. You may hear myths on how long something may stay on your credit report or how much one item on your report may hurt you compared to another. Whatever the case may be, there’s no need the fret. There are many ways to improve your credit score in big ways.
How to Drastically Improve Your Credit Score
There is no 1-2-3 checklist on how to drastically improve your credit score but there are some true-and-tried methods on how to improve your score. Here are just a few things you should be doing if you are trying to build or repair your credit:
- Check your credit score. Before you start you’ll need to know what you credit score is. Be sure you fully analyze your credit report and make sure that everything that appears is yours. Sometimes credit report agencies make mistakes or someone may have stolen your identity. If you see any information that looks wrong, contact the credit bureau.
- Get caught up. Once you’ve checked your score, get caught up. Most of the time if your credit score has taken a hit you’ve fallen behind. Catch up on your bills and then start to try and improve your credit score.
- Create an emergency savings. You’d think the next step would be to start paying down and paying off debt but everyone needs an emergency savings account (even if they have debt). Set yours up before you start trying to tackle your credit score.
- Set up payment reminders and pay your bills on time. Now you’ve checked your score, gotten caught up and saved a little emergency money. Next you’ll want to make sure you stay on track. You spent a lot of time getting caught up and saving so set up reminders for your bills or have them automatically drafted. This will help you improve your credit score by preventing late or missed payments.
- Now that you’ve gotten a schedule and everything is on track it is time to start paying stuff off. Pay down loans and credit card debt. When you can, pay it off completely. Once you do, keep the balances low on credit cards. Each of these things will help you drastically improve your credit.
- Re-establish your credit. If you have tarnished your credit begin to try and re-establish some credit. You can do this by paying your bills on time. You can also get a secured credit card to prove that you are able to borrow money and pay it off month-to-month.
- Lastly, don’t be afraid to communicate. Many creditors are open to payment arrangements. If you hit a hard spot open up to your lender, credit card company or other bill agency and let them know. Most of the time they will work out payments or even delay payment if it is possible. Not missing a payment (or being late) can really help your credit score over time.
Things to Keep in Mind
Remember that paying off an item in collections does not mean it will fall off your credit report. It will stay on your report for the same amount of time. However, if that item prevents you from, say, buying a home or getting a car you can get a receipt for your payment and present it to the lenders. Additionally, if you are trying to jumpstart your credit, don’t open too many accounts at once. This can really hurt your score.
If you are looking to drastically improve your credit score, it will take time. It will take months to increase 100-150 points for most people, especially if your credit has taken a hit. You can pay raise your credit score though by making a few small changes in your regular day-to-day life.
Have more suggestions on how to improve your credit score? Let us know in the comments.
Photo: My News 2
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Amanda Blankenship is the Director of Social Media for District Media. In addition to her duties handling everything social media, she frequently writes for a handful of blogs and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.