12 Tips for Improving your Credit Score this Year
And how my client improved her credit score by 200 points!
BY DANIEL GAMEZ
This article originally ran on GamezLawFirm.com on January 5, 2017
It is time for you to take control of your credit score! If you want to improve your credit score fast this year, then there are immediate steps you can take. Read on for simple ways to improve your credit score in the new year.
Tips For Improving Your Credit Score In The New Year
- Check Your Credit Score and Often — You get one free credit report a year from the 3 credit reporting agencies, Equifax, Experian and TransUnion. Get the free credit reports! It’s the first step in increasing your credit score. Go through your credit reports and make sure there are no mistakes or erroneous reporting.
- Credit Score Restoration — If you find mistakes on your credit reports, then you might need to do some credit score restoration. This is the process of disputing erroneous negative items on your credit score. If you can prove the mistakes, then the bureaus will make the changes in your credit report and your credit score should increase. There is an online dispute form for each bureau for a minor issue. If it’s a greater issue, then contact the bureaus in a letter. If you dispute the error online, you may be giving up your right to arbitration. Be sure to keep a copy of all correspondence in dealing with credit reporting agencies. Examples or errors on your credit report include: A late payment that is more than 7 years old, you paid off debt but it’s still on credit report, and wrong personal information (name, address, employer information).
- Keep your Balances at 30% — If your balance exceeds 30% of the credit available on that card, then your credit will be negatively affected. This is a great tip for improving your credit score.
- Don’t Open New Credit Cards — Be careful about opening too many new credit cards, as 10% of your credit score is made up of new credit. You can be seen as risky for opening too many new accounts.
- Don’t Close Old Credit Cards — And don’t close credit cards either, as the length of your credit history plays a significant role in your credit score.
- Spread Out the Debt — If you have an account that is about to max out then transfer some of that balance to another card if you have one without a huge balance already.
- Know the Difference in Revolving Debt and Non-Revolving Debt — Non-revolving debt has fixed payment amounts and dates with an end date in sight for when they will be paid in full. Revolving debt is considered riskier, as you can continue to borrow from them as long as you stay under the limit. You want a lower balance on your revolving debt to improve your credit score.
- Don’t Make Big Purchases — When you are trying to improve your credit score fast, then you do not want to make any large purchases that you can’t pay for right away.
- Pay Down Your Debt — This is obvious, but critical. Paying off high interest credit card payments should be a priority when trying to raise your credit score.
- Pay on Time — 35% of your credit score is payment history. Set up a system for paying bills, like a calendar reminder or spreadsheet, so that you aren’t late.
- Debt Settlement — This is the process of paying off a debt after negotiating with the creditor to pay them an often greatly reduced amount in a lump sum or with a short-term payment plan. The creditor would rather you pay them a reduced amount than declare bankruptcy and pay them nothing.
- Be Cautious of Scams When Trying to Improve Your Credit Score Fast — Be aware of credit score improvement scams. It’s illegal under the Credit Repair Organizations Act for a credit repair company to ask for fees before providing a service. Do not believe anyone who guarantees a result. If they tell you that you need to dispute even the accurate information on your credit report, then it very well may be a scam.
How My Client Improved her Credit Score by 200 Points!
I have a client who came to me in May of 2015 with nine different credit card accounts. I negotiated debt settlements with all nine of her creditors. Within one year of settling her last debt, her credit score increased from the mid 500s to 750!
This is YOUR year to gain financial freedom.
Story originally published on GamezLawFirm.com. Daniel R. Gamez is a debt relief attorney licensed to practice in all state and federal courts in California and Texas. To submit a debt relief success story or a debt relief question, email email@example.com. Follow Daniel on Twitter @gamezlawfirm.