You need to continually check your credit reports from the three agencies – Experian, TransUnion, and Equifax – so that you are aware of the reason for the drop in your credit score. You can access information from these three agencies at AnnualCreditReport.com. Each of these three agencies avails one free access to your reports a year. You should print the reports and have a pencil for review and cross-checking — line after line.
As you do your review, highlight the reasons for the damage in your credit reports and credit scores and make a note them down, one after the other. Some of the key points that you will pay attention to include:
Make all the Payments for collection accounts.
If your accounts are in collections and you have ways in which you can pay them, then you must do just that. In the determination of your credit score, there is not thorough scrutinization of new debt as compared to the case of existing debt.
For example, you may have a collection account with debt for say six years, the moment you clear the debt once, you stand good chances of having a good score.
Therefore, it’s vital that you prioritize having your collection account settled.
File a dispute Instances of fraud and Errors.
Report untrue cases that may impact negatively on your score to the credit reporting agency’s dispute process. As soon as you get this issue sort out, you will realize that your credit score will improve.
Increase the at which you use your credit card.
Sometimes, you realize that your credit card balances are closing to your limits, the best course of action for you at this point is to pay them off. However, if you are not in a position to clear these payments and you’re current on the accounts, it’s better that you request for an increment on your credit limits. Request for increased limits is not always going to a walk in the park as it might result in a hard inquiry.
Alternatively, you can open a new credit card. Use it, and ensure that your balance is at zero; this will widen the ratio.
Seek a debt consolidation loan.
The Consolidation of your credit card debt with a loan is another effective strategy. It’s a move that can result in a drastic reduction in your credit utilization ratio. Installment account debt has a minimal impact in the credit scoring formula compared to revolving balances.
Minimize the number of accounts which have with balances.
You might have accounts with smaller balances, settle the payments on these accounts (with smaller balances) rather than struggling with paying all your accounts in bits.
This is an approach that will help improve your credit score. After settling these other accounts, it becomes easier to send more money to the remaining accounts.
Note that if you intend to lower the interest payable on multiple balances, it’s essential that you first settle those accounts with the highest APR.
Start Making your Payments on time, beginning now.
If you notice that late payments are impacting negatively on your numbers, you should change this into early payments.
If you borrow and make your payments on time, you will be doing a great favor to your credit score.
Only Apply for those cards you qualify to own.
Be realistic; it’s critical. It will help you apply for cards you qualify for, and you will own comfortably, all these depend on your credit score. You should know and live by your acceptable standards because a denied card application is likely to results in a strict inquiry. We have tools like the CardMatch which helps you find a pre-qualified card that are on offer; such cards will not affect your credit score.
Work towards offsetting negative Records.
We have some negative notations such as foreclosures, bankruptcies, and late payments which you can do little to remove. They naturally drop off. However, you can assertively and responsibly use credit products. Making Payments in full amounts and on time will prove that you are worthy for credit in the future. Paying these balances with multiple accounts is an added advantage.
Consider Piggybacking on a Credit card that is well-managed.
Another way of quickly adding points to your score is by becoming an authorized user of another person’s credit card. The history of this particular card will reflect on your credit report if the payments of your balances are always paid off and on time, you will have your credit score soaring high almost instantly.