The following is a sponsored post for CreditRepair.com
For reasons I’ve never understood, it’s sometimes debated whether having a good credit score is important. Sure, if you never need to take out a loan, buy a house, refinance a mortgage, rent a house, or get decent rates on insurance then yeah, you don’t need to worry about your credit score.
But for the rest of us, we do.
Having a good credit score can save you tens of thousands of dollars in interest on a mortgage. A good credit score can be the difference between you and other applicants landing a rental. It can also save you hundreds per year in insurance costs. (I used to be an insurance agent and saw the HUGE effects a credit score can have on rates.)
And these are only just a few of the reasons you need a good credit score.
But, what if your credit score isn’t the best? While that might suck right now, there are very practical and easy things you can do to raise your score.
Here are five things to do this year for a better credit score.
# 1 – Check Your Credit Reports (It’s Free and You NEED to Do It)
You can get one free credit report per year from each the three major credit bureaus (Equifax, Experian, and Transunion.) Your credit report will contain a list of information of all the credit you’ve ever had including credit cards, car loans, student loans, mortgage, etc. Your credit report will show how much you owe, your payment history, and when the loan was taken out.
The first thing you need to do is go to annualcreditreport.com and get a copy of your credit report from each of the three bureaus.
#2 – Dispute Any Discrepancies on Your Credit Report
Now that you have your credit reports in front of you start going through them and looking for any mistakes. If everything on your report looks correct, then you can skip to the next step. However, if you’ve found misinformation on your reports, you’ll need to have them corrected.
To have mistakes corrected you will need to send a letter and proof of the mistake to the appropriate credit bureau. (The FTC has sample letters you can use here.) The credit bureau will have thirty days to investigate your claim. They will notify you of the results in writing.
# 3 – Always Pay Your Bills on Time
Now that you’ve verified the information about your credit history it’s time to start bringing your credit score up.
The number one factor that goes into your credit score is your payment history!! If you do NOTHING else, make sure that you’re paying your bills on time. If you’re always sending payments in late consider using autopay.
# 4 – Be Careful with Your Available Credit
The second biggest chunk of your credit score is how much credit you’re using. If you have a bunch of credit (credit cards, personal loans, etc.) and they are all maxed out then you’re credit score will take a hit.
A general rule of thumb is to keep revolving credit (such as credit cards) at 30% or lower. This means if you have a credit card with a $1,000 limit the balance should be no more than $300.
# 5 – Stop Opening New Credit
While you’re working on improving your score don’t take out any new credit. (This is unless you have NO credit in which it would make sense to open a credit card.)
Opening credit can show as a hard inquiry on your credit report and lower your score.
Along those lines you also shouldn’t close any credit accounts as they can shorten your length of credit history, which is another factor used to compute your credit score.
When You Need Help..
Raising your credit score means following a few simples each month. Once you’re on the right the path you’ll just need to give it time for your credit score to increase.
If this all seems overwhelming to you there are places to get help.
If you don’t feel comfortable checking and disputing items on your own, CreditRepair.com offers this service. They will consult with you, check your credit report, and challenge any questionable items. Average credit repair users have seen a 40 point increase past average in their credit score in four months.
You can learn more at CreditRepair.com