So, you’re finding yourself at that point in life where you want to buy a home or a condo, but your credit score is a little bit lacking. It’s not great, but it’s not perfect, either. The goal is to get a better credit rating, which means you’re going to have to do some footwork; reports don’t fix themselves. Remember that increasing your credit score does not happen overnight, but it does get better as long as you are proactive. Get a copy of your credit report and get a word processor ready. You’re going to be doing some work while learning how to boost your credit score.
Following are five tips that help you improve your overall score:
- Examine your credit report with a fine-tooth comb. Mistakes are frequently found on reports, and they stay there until you challenge them. There are plenty of template letters you can use to dispute, or use the online option offered by the reporting agency. Sometimes the online option works, sometimes it doesn’t. Always be prepared to send in a registered letter to get their attention that there’s incorrect information and you want it gone.
- The other half of disputing can work on old dings that have aged out. That is, you can send in a letter saying, “that’s not mine”. The older the blemish, the more likely the reporting entity is to say, “Yes, that’s yours”. Don’t hesitate to dispute these issues; you’d be surprised at what can happen when you get proactive.
- Check your credit card balances. If you’ve got cards that are always near the limit every month, get them lowered. Part of how to boost your credit score is creating a positive image of credit responsibility. If you’re near max every month, you’ll tell creditors that you’re running at your financial limit every month. Stop spending on the cards and pay them down.
- Get your old cards out of the drawer and spend a little on them. Keeping an old account active looks good, as the longer you own a card, the better your credit. Not using them tells the creditor to close your account, and you want to keep them open. So, charge something small, then pay it off immediately to keep the account fresh and active.
- Check your credit report for inaccuracies. Sometimes it so happens that the credit card bank reports your limit as being lower than it really is. Other times, a card is represented as the wrong type, ie. a revolving account when it’s a charge. Clearing these issues up helps to increase your scores.
Knowing how to boost your credit is a bit of an art form, but in the long run, you benefit yourself by taking these steps.