Things to do:
- Pay your bills on time. Every time you pay a bill 30 days late, it lowers
your score. The more recent the late payment is, the more that late
payment lowers your score. - If you missed a payment, get current on that account. If you are past due
on an account, just making the late payment – and not making the current month’s payment – will continue to lower your score. - Keep balances low on credit cards and other revolving credit accounts.
-
- If your balance is more than 70% of your credit limit, it lowers your score the most.
- If your balance is 50% – 70% of your credit limit, it lowers your score a bit less.
- If your balance is 30% – 50% of your credit limit, it lowers your score even less.
- If your balance is below 30% of your credit limit, it will improve your score.
- When you review your credit report, you will see a list of things that are lowering your credit score. Work on those things to raise your score.
-
- The reasons your score is not perfect are listed in order, according to the impact they have on your score. Fixing the first two will raise your score the fastest.
- Credit analysis software is available to some lenders. It will tell you exactly what to do to raise your scores – it also tells you how many points your scores will go up.
Things NOT to do:
- Do not close accounts. The longer your accounts are open, the higher your score will be.
- Do not pay off old collection accounts or old charge off accounts. Paying off an account that no one is actively trying to collect will change the “date of last activity” from the old date to the current date, and lower your score, even though it is now paid off.
- NEVER pay anyone to “repair” your credit. They are only ripping you off! You can fix errors on your report by yourself – for free. Use a lender who will show you how, and who will help you – for free.