Easily improve your credit score on your own.

If you’re battling a lower than desired credit score – don’t worry, you are not alone. Digging yourself out of bad credit might feel long and exhausting but with hard work and determination, you can slowly begin to build your credit back up. Now that we’ve covered what can affect your credit score, in a prior blog, there are ways you can work on improving your credit score on your own, without the use of credit repair companies. While you cannot remove negative marks from your credit report, here are three ways you can begin to improve your score.

1. Look for any errors and dispute them.

   1. First, you’ll need to obtain a copy of your credit report. Don’t worry, it’s free! You’re entitled to a free copy of your credit report each year from the top 3 credit reporting companies (TransUnion, Equifax and Experian). You can order a report online from annualcreditreport.com or call 1-877-322-8228.  

   2. Once you’ve received your credit report, look for any errors or mistakes and take note of them. If you do come across incorrect information, gather information that proves this and contact the appropriate credit reporting company to file a dispute. While it may seem easier to dispute information online, take the time to send your dispute paperwork via snail mail and be sure to send it as certified mail to ensure you’ll have a paper trail in case information gets lost or mixed up.

2. Reduce your credit utilization.  

   1. Credit utilization is your total amount of debt in relation to the total credit given to you. If you hold high balances on your credit cards, work your way to paying down your credit cards. A good rule of thumb is to keep your credit card debt under 30% utilization, which means only using 30% or less of your total credit limit. This shows that you are not overspending and can manage credit responsibly. For example, if your credit card limit is $1,000 try not to exceed a balance of $300 on the credit card. Ideally, the best credit utilization ratio is 10% or, using our example, a $100 balance on a credit card that has a $1,000 limit. 

   2. When it comes to credit in relation to credit cards, many individuals opt to make a purchase on credit and pay off the balance at the end of the month or before the due date on the statement. A simple way to do this is to use your credit card for groceries or gas and pay off the balance in full at the end of the month.

3. Open a Secure Credit Card. 

   1. Designed to help build or repair credit, secured credit cards are a great way for people with a lower credit score to build credit. A secured credit card requires consumers to put down a deposit, which is usually equal to amount of your credit limit. While you should pay your monthly credit card bill the same as you would with an unsecured credit card, if for any reason you are unable to make your monthly credit card payment, the deposit will be used to pay your balance.

We understand that working on improving your credit score may seem stressful but we have tools to help! To schedule an appointment to speak with a financial counselor about your credit or another unique financial situation, click here.

By increasing your credit score, you open yourself up to new opportunities such as lower interest rates and the ability to be approved for loans that help you take that next step in your financial life.