Effective Ways to Improve Your Credit Scores
Everyone talks about the best ways to improve credit, but there are so many different opinions it can be hard to keep up with what actually works and what doesn’t. It doesn’t matter whether you have a low score with TransUnion, Experian, or Equifax, or even all three. You need to find ways to improve it. First and foremost, you should review each report and dispute any errors or misinformation. Most people don’t look at their reports closely and will lose valuable points for simple errors. Make sure that everything from your name and job to the accounts that you hold is accurate.
Having credit scores above 700 will create more opportunities for you to qualify for low rate home loans, auto loans and credit cards. Homeowners will find my flexibility for refinance mortgage options and second mortgage loans for cash out. Many homeowners have signed up for credit monitoring to ensure their high credit scores and their reputations are protected. It’s better not to be put into a position in which you are forced to work with a bad credit mortgage lender, because you missed a payment on one of your bills or had errors being reported on your credit report.
If you have any old debts, you need to pay them off. If accounts are already in collections they will typically stay on your report for 3-7 years. Therefore, you should try to pay down your current debt first to get an improvement in your score. The collection accounts are already on there and even though you can pay them, it’s not going to affect your score because they won’t disappear once they are paid. If you pay down your existing debt, you will have a lower debt-to-income ratio and be a more creditworthy consumer.
If you have old accounts that have been closed, charged off, or paid in full, make sure that they clearly state that information. Often, companies will settle a debt and never report that it is paid in full on your credit report. Having paid bad debt is much better than having unpaid bad debt. Another way to boost your credit score with TransUnion, Equifax, and Experian is to apply for new accounts if you can. Getting new credit can help boost your score. The more accounts you have, the better you look as long as they aren’t all maxed out.
Also, never close accounts. This cannot be stressed enough. Some people pay off accounts and then close them, thinking it will improve their score. In reality, it will hurt more than it helps. You need to pay down debts and leave the accounts open. Your credit is judged on the length of history that you have and if you close older accounts, your history will get shorter and hurt your credit score. Pay your balances down, fix any errors on your reports, and make sure that you pay off all old debts and collection accounts and you will soon see your credit score rising.
