3 smart moves to improve your credit score

A man checks his credit score.
May 30, 2019 | Tracy Scott

The interest rate and terms offered as a result of your recent auto loan application weren’t what you had expected. The lender said your credit score didn’t meet the minimum requirements even though you only apply for credit when needed and you have a 10-year credit history. You’ve made a point to have a variety of credit accounts that show you can manage different types of credit responsibly. All of this leaves you wondering - is there something else that you can do to improve your credit score?

Yes. Here’s how to raise your credit score.

1) Correct Reporting Errors

You can legally remove items incorrectly reported on your credit report.  Order your credit report from each consumer credit reporting bureau: Experian, Equifax, and TransUnion. Review the contents of each report and confirm that you held each account listed. Be sure to check your report with each agency since it’s possible for incorrect data to appear on one credit report and not another. If late, delinquent or collection statuses are incorrectly reported, follow the credit bureau’s dispute instructions to challenge each instance.

The Fair Credit Reporting Act (FCRA) guarantees your right to a free copy of your credit report once every 12 months. You must request a copy from the credit reporting agencies since they aren’t automatically provided to consumers.

2) Pay Your Bills on Time

Paying your bills on time impacts your score more than other factors. Creditors want to be sure that when they extend credit, they will be repaid on time and as agreed. Catch up on past due accounts as soon as possible. Consumers might ignore collection accounts thinking that their credit is already damaged, so why bother. However, in some cases, you can still turn this situation around. Contact the creditor regarding the collection activity. Request that they remove the collection status from the credit report once the account is paid in full.

Late payments can be due to forgetfulness, being financially overextended or both. Late payments appear on your credit report regardless of the reason. When you make timely payments, creditors believe you are financially responsible.

Pro tip: Schedule automatic payments from your credit union account to ensure you never miss a payment again.

3) Keep Credit Utilization Low

Future creditors also look to your amount of available credit as an indicator of your ability to take on additional financial responsibility.  Keeping your balances near the credit limit lowers your credit score. Try to keep account balances below 30 percent of the available balance of the account.  

Pay down current debt to increase your available credit.

Bonus Tip

Look for patterns on your credit report. Here are a few to consider:

  • How many late payments do you see within the past 18 months?
  • Are credit accounts at or near the credit limit?
  • Do you see a cluster of new credit applications in the past six months?
  • Has your credit score been pulled recently? You may be surprised how often your credit score could be pulled.
  • Did you close accounts you recently paid off?

Each factor may have negatively contributed to your current credit score. Some credit reports include a list of specific factors affecting your score. Use this information to identify additional steps that will improve your unique credit profile.

Less than stellar credit can be costly both financially and emotionally. Try to turn your credit around by applying these specific moves to improve your credit score. Don’t forget to review your credit at least annually and watch your score increase as you apply these tips. While the results take time to appear on your credit report, the sooner you begin, the sooner you may be able to refinance that auto loan at a lower rate.


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