Make your payments on time.
Everyone has done it at one time or another during their adult life, whether by accident or maybe you just forgot to pay your car payment or your credit card bill or maybe you just didn’t have the money when the payment due date rolled around.
Regardless of why previous bills weren’t paid on time, it’s never too late to start fresh and start improving your credit score. Beleive it or not late payments even on small balances can have disastrous effects down the line when you need to use your credit for more important purchases such as rental applications, car loans or home loans.
Making payments on time is one of the quickest and easiest ways to improve and build a strong credit score.
If you are going to be late on payments never let it go more than one full billing cycle, most billing cycles are between 21- 30 days between payments. The reason it is important to make sure you’re making your payments before the next billing due date expires is most creditors will automatically report late payments after one full billing cycle. Which reflects negatively on your credit score.
Obviously, it is better to try to make your payments on time, on time payments give creditors more confidence in your ability to repay loans and to stick to your financial commitments helping you in turn to build stronger creditworthiness.
Request a credit report
Did you know that you can request a free copy of your credit report once a year?
If you contact one of the three credit reporting agencies (Experian, Trans Union, Equifax) you can request a copy of your credit report. It’s an easy way to review where you stand and to check what is reporting to your credit, it’s also a good way to check for inaccuracies or even in some cases lines of credit with your name attached that you may be unaware of.
Make sure you review your credit report for any inaccuracies, your credit score is based solely on the information reported to the three credit bureaus, (Experian, Trans Union, Equifax) if the information in your credit report is inaccurate you should contact the reporting agency to dispute the information in the report.
Under the Fair Credit Reporting Act, you’re entitled to one free credit report from each of the three credit reporting agencies once every 12 months. You can request a free credit report here
Clean Up Past Debts
After reviewing your credit report it’s time to get busy cleaning up any past debts that could potentially hurt your credit score down the road.
Outstanding debt doesn’t just disappear and can stay on your credit for years affecting your credit score long after the money has been spent. If you can locate the contact information for the outstanding creditors it’s a good idea to reach out to them and try to negotiate an agreement to settle past due accounts, in doing so it’s important to secure in writing what type of agreement you’re able to reach and then stick to it.
Paying off old debts not only helps to pump up your credit score but will also help you feel better knowing you won’t have past debts coming back to haunt you later on.
Payoff smaller credit cards
So maybe you went on a shopping spree and created a hefty amount of credit card debt by opening up credit accounts at every store you visit, it’s easy to do. Retailers offering discounts up to 10% at checkout can be a tempting offer that is hard to resist for many people, before you know it you have 10 credit cards to retailers charging high-interest rates on balances if your unable to pay off the balance every month.
According to a recent study, Americans have an average credit card debt of 15k -$16k in credit card debt.
Regardless of what type of credit accounts you open, it’s very easy to find yourself faced with a lot of small credit card debt that adds up fast if you’re not wise about how you manage your finances.
Don’t let these numbers discourage you, there is hope if you really want to improve your credit score and give yourself some breathing room start by putting a stop on the spending an reel in your finances.
Instead of paying just the minimum payment every month, start paying as much as you can comfortably afford every month, start with the smallest debt and continue this until its paid off and then repeat the same process with other credit debts.
Over time this will have a positive effect, you’ll have more money available to pay off larger debts and it will help boost your credit score.
Live within your means
In a world filled with social media, smartphones and everyone wanting to impress their friends with photos of lavish trips to exotic places or show off coolest new electronics or living in a decked out crib, people are overextending themselves financially like no other time in history just to maintain the appearance of ” keeping up with the Joneses” , if your serious about boosting your credit score and want to cut down on debt you will have to make a firm commitment to living within your means.
Creating a budget and sticking to is key to success if you’re serious about boosting your credit, it will make it easier to account for your expenses and pay your creditors every month.
If you’re shopping for a new car then buy a car that you can afford, if you’re making $46k a year don’t run out and try to buy a car that costs $50K, your better off finding a car that is more reliable and that you can afford the monthly payment without cutting into your allotted money for other bills.
Applying some of these simple common sense tips can help boost your credit score in 2018