Did you just check your credit score and it sucks? What are you going to do? Here are step by step instructions on how to improve your credit score. It won’t happen overnight but it can happen sooner than you might think. Have you ever heard of people who after going bankrupt were able to purchase home within a couple of years after? It’s possible. Whether you are trying to buy a home, a car, get a credit card or any other type of loan having a high credit score is key to getting the lowest possible interest rate on those loans.
Step 1: Your credit report
The first thing you want to do is see how bad it really is. Order your credit report and credit scores. You’ll notice that the 3 main credit bureaus will all give you a different score. That’s even if they all have the exact same information on your credit report. In reality though 26% of credit reports in 2013 have errors in them that usually don’t favor you. So, order your credit report and look for discrepancies.
Step 2: Dispute your credit report
If you’ve checked your credit reports and there is differences then you’ll want to dispute them directly with the bureaus
If there are no challenges with your credit score and you just have some credit lines you haven’t paid on or just don’t have enough credit then you’ll need to take a more direct approach to paying off those delinquent balances and possibly getting new credit you can use to rebuild your credit score. The best, most affordable way to build your credit history is to go to a bank or other financial institution and get a secured credit card.
Here’s an example of a Secured credit card. You give a bank $200. They put that money in to a cd for a specified period of time, usually 1 year. Then they issue you a credit card with a balance of $200. You can use this card just like a credit card. If you use the card and pay it off every month you will help your credit score dramatically. However, if you don’t pay your secured credit card the bank will liquidate your cd to pay your credit card statement.
Step 3: Recalculate your credit scores
After you’ve been successfully disputed your credit reports and you have seen with your own eyes that they’ve been corrected it’s time to have your scores recalculated.
The key to a good credit score is having multiple open lines of credit without using all of it and most importantly paying your payments on time.