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Top Tips for Fixing Your Credit Score

credit-scoreImproving your credit is one of the ways to improve your financial health. However, achieving a perfect credit score is not that easy since it’s a long-term journey. Just like in attaining good health, improving your credit health takes a lot of time and effort. If achieving a good health would require you to work out and have a healthy diet, the same can be said to boosting your credit health.

But don’t worry because we’ll show you the secrets to fixing your credit score. Here are some of the things that you should take note of:

What to do: Ask for a Higher Credit Limit

Estimated Time: 10 minutes

Possible benefit: A higher credit limit will possibly result to lower credit card utilization.

Approach:

If you have an excellent record, it won’t be hard to request a credit limit increase from your credit card company. This may seem like a daunting task, but what’s a quick call to your credit card company or a simple request online if it will help boost your credit health? You may be amazed how a 10-minute call can do so much towards improving your financial health. If however you’re not up to just calling your credit card company or a face to face transaction will keep you ensured, you can always ask for a meeting with your local branch’s representative anytime.

You can choose any of the three modes mentioned above according to your preference. But whatever mode of contacting your credit card company is it that you’ll choose, just remember that their customer representative may ask an explanation from you to as to why you’re requesting for such an increase. So be prepared to furnish additional personal information such as your income and employment status as well as the required supporting documents for a faster transaction.

Disclaimer:

Expect the possibility that your credit card company may commence a new hard inquiry on your credit report. However, this hard inquiry may have a downside – it may have an initial impact on your score. So in asking for a limit increase, it’s advisable to first ask your credit card company if there’s a possibility that this will happen so that you’ll know what to expect. You can then make your decisions based on these expectations.

What to do: Write a “Goodwill Adjustment Letter”

Estimated Time: 15 minutes

Possible benefit: A Goodwill Adjustment Letter may help remove a past late payment in your good-looking credit history.

Approach:

There’s nothing that can effectively stain your otherwise good-looking credit report than a past late payment. Credit card companies may see your past late payment as a form of irresponsibility on your part. This may be annoying especially if you just forgot to make the payment on time. So if you want that stain removed, you can write a goodwill adjustment letter to take away that past late payment in your credit report. You can do this by explaining what happened and by showing that you have been faithful in your payments all along. You can also show your positive track record to back up your point.

Disclaimer:

Be patient. Be prepared to wait. Expect that credit card companies will not necessarily have to erase that late payment record immediately. But if in case you haven’t heard anything from them after 30 days, you can always follow up your request.

What to do: Plan on how you can pay your credit card debt at a faster rate

Estimated time: 30 minutes to 1 hour

Possible benefit: Effective planning will not only help reduce interest but can also help lower your credit card utilization.

Approach:

Your financial health is one of the crucial things that can greatly affect your life so it needs very careful planning on your part. If you want to improve your credit health, then it’s advisable to plan how to pay down your credit debts faster. Planning will not only help you to avoid the situation where you’re carrying debts from month to month, but it will also help lower your credit card utilization rate to lower than 30% which is the recommended rate by credit experts.

But in order that you can effectively plan, you must know first where you stand. You can do this by connecting your online accounts. Once connected, you can go to the “My Accounts” tab to view your individual cards’ utilization rates. Choose those which are reporting more than 30% first. If you can afford it, it’s highly advisable to increase the amounts that you pay from the minimum payment so that you can gradually lessen your utilization rate.

Disclaimer:

Just don’t rely too heavily on your credit cards while you’re working on lowering your balances, otherwise, you’ll be back all over again to where you’ve started.

What to do: Transfer your credit card balances

Estimated Time: 15 minutes for the application and around 7-10 days for the approval

Possible benefit: Transferring your credit card balances may strengthen your debt pay-off plan and increase your total number of accounts.

Approach:

Keeping your payments up to date is not that simple. Making multiple payments to a number of credit cards with different balances may all the more seem very tricky and confusing. If you don’t want to deal with all of this confusion, you can make the way you pay your balances simpler by opening a balance transfer card. A balance transfer card will enable you to transfer all or some of your other card’s balances with little to no interest for a year or two. Of course, the introductory balance transfer rates, promotions and fees vary depending on the balance transfer card that you’ll pick so make sure to review the card’s terms carefully before opening one.

Disclaimer:

This method is only good if you’re ready to deal with your credit card debt once and for all. This is because if you won’t pay your balance transfer completely during the introductory period, credit card companies will usually charge you with interest on the whole transferred amount.

What to do: Watch out for errors in your credit report

Estimated Time: 1 hour

Possible benefit: Avoiding errors will make your credit history more accurate.

Approach:

Accuracy is important if you want your true financial status to be reflected in your credit report. Your credit report in turn can affect your ability to get approved. This is why cleaning up your credit report must be on your top priority list. You can do this by checking and re-checking your credit history as well as watching out for errors that may be reflected in your credit report.

Disclaimer:

Not all credit repair companies can help dispute and perfectly remove all the negative information in your credit report, especially if there are accurate negative items in your report. Thus, before hiring a credit repair company, it’s always advisable to read first about them from sources like the Consumer Financial Protection Bureau and the Federal Trade Commission.

In Conclusion

Always remember that fixing your credit score takes time. Your scores depict a long-term and overall picture of not just your financial health but also your financial habits and spending pattern. But don’t worry, with the right planning and approach, plus patience, you’ll be able to improve your credit health in no time.

 

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