How to Start Improving Your Credit Score Today

by Elizabeth Harp

Trying to understand the various factors that influence your credit score can seem overwhelming for those who are looking to improve their credit scores. Knowing what to focus on when rebuilding credit can pose quite the challenge, but take heart! There are a variety of short-term and long-term actions that you can take to start improving your credit today.

The only way to improve your credit score is to start now. Here’s what you need to focus on so that you can one day reap the rewards in the form of a stellar credit score:

Pay Your Bills

Paying your bills on time is essential to improving your credit score. Both delinquent payments and collections can negatively impact your score. If you do have delinquencies on your account, make sure that you pay all of your bills on time moving forward so that your credit report can reflect good payment history. The more payments that you make on time, the more your score should increase.

Manage Your Credit Cards

Managing your credit cards responsibly tells lenders that you can handle other forms of credit. However, you should avoid carrying high balances on your card, as it can significantly reduce your credit score. Opening more credit cards just to improve your credit mix and closing unused cards probably won’t improve your credit score, either. If you have credit card debt, start paying it off now as opposed to moving it around to different cards. Making your payments on time and paying above the minimum payment are all ways to show positive change on your credit report.

How Inquiries Affect Your Credit Report

The information found on your credit report directly affects your credit score, which is why you should take advantage of your free yearly report. If you’re looking to apply for a loan and are shopping around for credit, you should do so within a 14-day period. Credit bureaus group specific types of inquiries together as one if it is clear that they are for the same purpose. Following this strategy is key to maintaining a good credit score.

Another important piece of information to remember is that closing an account does not make it fall off your report immediately. Different types of records will stay on your report for designated periods of time based on standards set by the credit bureaus. Keep this information in mind when reviewing your credit report:

  • Delinquencies stay on your report for seven years.
  • Public record items—bankruptcies, civil judgments, tax liens, foreclosures, and wage garnishments—stay on your report for seven years. However, some unpaid tax liens and bankruptcies stay on your report for 10 years.
  • Inquiries remain on your report for two years.

Monitoring for Fraud

An important aspect of keeping track of your credit report is monitoring for fraud, which can severely impact your credit score. If you find a fraudulent charge on your report, you must dispute it in order to have the information removed. Below is information on how to dispute errors on your credit report with the major reporting bureaus:

Rebuilding Credit Takes Time

Remember, rebuilding your credit takes time, but it is worth it. Don’t forget to request your annual free credit report—it’s the best way to stay on top of changes to your credit report and address any issues that may arise.

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