The most effective methods to help you improve your credit.

Your credit score might be the most important number in your financial life. The higher your score is, the more you qualify for loans and credit cards with the best terms—meaning that you will probably be able to save money.

If your credit score is not where you want it to be, just know that you are in the same boat as countless other people. For reference, here is the scale used by FICO:

  • 300 – 579: Poor
  • 580 – 669: Fair
  • 670 – 739: Good
  • 740 – 799: Very Good
  • 800 – 850: Exceptional

A common misconception is that once your credit becomes poor, or even fair, there is no going back. You are stuck with a bad history for life. This is just not true!

Your credit score is constantly changing based on your actions now. If you start making the right moves, you can change your score from poor to excellent! All it takes is a little bit of hard work and focus.

Before you can begin taking any steps to repair your credit score, you need to actually determine what your score is and obtain your report. We have outlined numerous routes you can take to get that information for free here, so check it out!

How can I fix my credit score?

Once you have checked your score and obtained your report, there are several ways you can work to improve your score:

  1. Check for errors. Unfortunately, there are sometimes cases in which your credit score is wrongly damaged because of inaccurate information. Comb through your report to ensure that everything is correct before you proceed with any of the other steps. This blog [LINK] tells you what to look for and how to fix credit report errors.
  2. Pay bills on time. This is one of the most critical rules when it comes to building your credit. No matter what else you do, your credit will not improve if you keep garnering more and more past-due payments. On that note, you also need to pay off past-due bills; they are dragging you down!
  3. Maintain low balances. Credit bureaus pay attention to not only which accounts you open but also how much you are using on those accounts. A good rule of thumb is to keep your credit utilization ratio below fifty percent—for example, if you have a credit line of $1,000, do not use more than $500 of it during that period.
  4. Be wary of closing credit cards. Unless you absolutely have to (such as when you are paying an annual fee for a credit card you no longer use), you should steer away from closing credit cards. This lowers your overall average credit history and can hold your score back. If you must close an account, try to close the newest one if that is an option.
  5. Don’t take on too much. Conversely, do not apply for too much credit. Not only do you not want to find yourself drowning in a sea of debt from too many crisscrossed accounts, but any hard inquiries completed during the application negatively impact your score and stay on your history for two years.
  6. Increase credit limits. Many times, if you call and ask politely, the bank will be more than happy to do this for you (granted that you have a decent payment history). This lowers your credit utilization ratio as long as you do not increase your spending in proportion to the increase in your credit line.
  7. Pay off high-interest accounts. These are the accounts that weigh you down the most. Focus on paying off high-interest accounts, in order of oldest to newest. Not only do you decrease your debt as much as possible, but you also increase the average length of credit with your new accounts.

What if I don’t feel confident enough to do it myself?

If you are worried that you will somehow mess up, or if you have tried all of the above methods to no avail, you might want to look into paying for a credit repair service. After some intense web-surfing, we gathered some of the most recommended credit repair services out there:

DISCLAIMER: We are not in any way affiliated with any of the companies listed above and are not recommending them based on our experience. Everybody’s experience with these services may vary by situation, so we recommend doing your research.

Each of these companies varies in price, how long they have been in business, and basically every other aspect of a company, but they are all highly recommended and have stellar reviews. Do you research, reach out for consultations if they are free, and determine which service would be best for you. If you decide on a service not on this list, make sure you check to see if they have good reviews and if they are reputable—you don’t want to give your information away to somebody you can’t trust.

Are there any other options?

If you do not want to pay the price for a credit repair service, but you do not yet feel comfortable embarking on your credit repair journey, then there are a few other things you can do to prepare yourself.

    • Take a deep dive into forums. Forums like CreditBoards are entirely free, and real people are speaking about their experiences and how they improved their credit scores. One of the best ways to learn how to do something is from someone who already did it.
    • Turn to YouTube. We know this might sound a little odd, but YouTube is a goldmine of tutorials. There are so many videos out there that can teach you the ins and outs of improving your credit score, and, again, many of these explanations come from people who did it themselves.
    • Research, research, research. What it boils down to is doing your research. It will be extremely hard to fix your credit if you don’t know anything about the how and the why, so utilize the resources at your fingertips and learn all that you can about credit repair.

The most important thing you can do is be patient. No matter what service you employ or which method you decide to use, it takes time for your credit to heal. We recommend using one of the free credit score applications (which you can find here) to track changes in your score. If you have any questions or any recommendations for additions to this post, contact us and let us know!