Updated: Aug 17, 2020
It took me a while to boost my credit score. It has hindered me in so many annoying ways over the years. Stopped me from getting jobs, cars, homes etc. It's not that I had bad credit I just didn't really have any credit. I had a few medical bills from an auto accident and my pregnancy in collections. Besides, that not much else was on there. Basically, I was a ghost in the credit score game, which is why I needed to fix my score and start #adulting. These are my personal tips for boosting your credit score.
Negotiate Negotiate Negotiate
Call any collectors you have on your records and see if they will settle your debt for a lower price. This works best with creditors that have nothing to lose such as apartments and utility providers. Once a debt is sold to a collector, the original liability is typically settled, and the debt becomes the responsibility of the collection agency. When that happens an interest rate is normally applied which allows for some wiggle room.
If you have closed accounts on your record call the collector or company and see if they will submit a removal/discharge. Typically these won't matter to lenders, but closed accounts can hold you back depending on the type of closed account and the credit you are aiming to apply for. Keep in mind, if the closed account creditor submits for removal it can take months to be updated by the credit bureaus, up to six months, to be completely discharged.
If you have larger delinquencies, try setting up a payment plan. Paying a little every month will reduce your balance and lower the amount listed on your report. This won't do wonders for your credit score ,but will gradually bump it up while lowering your amounts owed. Repairing or building a credit score is not an over night process.
Besides the score, one of the important factors a lender will consider is your debt to income ratio. Maybe chipping away at your balance won't do wonders for your score, but it will aid in evening out your ratios.
If you have multiple accounts check in with your local financial institution professional and discuss consolidating. Consolidating can reduce the amount of credit accounts on your score while lumping multiple debts into one loan, in turn leaving you with only one easy payment most likely with a lower interest rate.
Secured Credit Card
If you are just starting out with credit, I suggest getting a secured credit card. They typically have low limits so there isn't a chance of getting too far out of control. Use the card for small reoccurring obligations such as a cell phone bill, utility bills, groceries etc. Another good tip when it comes to credit cards is paying the full balance at the end of the month. That way no interest is incurred since cards typically have high interest rates, especially cards awarded to folks with a not so steller financial background. The steady use of credit will show a positive payment history while boosting your credit score. It's recommended to use only about 30% of your credit limit.
Dispute Fraudulent Accounts
If you notice anything funky on your report dispute it. You can have one dispute happening at a time and disputes can be easily done directly through the creditors website or even sites such as Credit Karma. I have disputed three items on my report that I did not recognize and they all went through the process and were removed. Removing fraudulent or nonobligatory debts is the easiest way to boost your credit score. Credit is hard enough to manage without Identity Thieves making things even more difficult.
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