Repair Your Credit Score
Your credit score plays a major role in determining the rates you pay for your home, car and any other purchases requiring a loan. The difference in your monthly payments with a credit score in the 500s as compared to one in the mid 600s (a mark often considered “good” by lenders) is often hundreds of dollars.
The key to experiencing savings is a little research and repair work. Below are four steps you can take yourself to restore your low credit score.
Credit Score Repair Step #1: Request copies of your credit reports. Before you can do any repairing, you need to know what's been reported to the three credit bureaus – Equifax, TransUnion and Experian – on your behalf. The websites for each agency is as follows:
There are also numerous services online that can help you get copies of your credit reports. (Requesting your reports won't affect your credit score if your order directly from a credit reporting bureau or a company authorized to provide credit reports to consumers.)
Credit Score Repair Step #2: Dispute any inaccurate data. Once you have your credit reports, address any inaccuracies in letters to each credit bureau (you can also submit disputes online). Make a copy of the letter(s) as well as any supporting documentation, and send the documents via registered mail so you can monitor delivery. If within 30 days you haven't received a response, follow up with another letter or phone call.
Credit Score Repair Step #3: Maintain a low balance. The lower the balance on your credit cards, the higher debt to credit limit ratio you have – a factor that counts for up to 30% of your credit score. If necessary, contact your credit card company and request a higher credit limit. Be careful, though. More money doesn't mean more spending. Your objective with this step is to increase your debt to credit limit ratio.
Credit Score Repair Step #4: Create credit-boosting habits. There's no reason to try improving your credit score if you don't begin developing positive spending habits today. Here are a few tips to help you begin:
- Limit your credit card debt to below 50% of your available credit.
- Only apply for the credit you need.
- Keep older credit cards to demonstrate your long-term credit history.
- Reduce the number of credit cards you own – one each for spending, emergencies and backup
Contact us today to learn more simple steps for repairing your credit score, while experiencing higher savings and lower lender fees.
