Free Credit Score

How to Improve Your Credit Score?

Different data in an individual's credit report are evaluated to come up with the FICO credit score. It is important to understand how data are interpreted to improve a person's credit score. The data can be categorized into five types with the payment history and the amounts owed by the person the most important data. The other data categories are types of credit used, length of credit history and new credit.

People suffering from bad credit should put in extra effort to repair it but should remember that it is not that easy and it will take time. Quick-fix techniques are not recommended because it often times backfires. Offers of fast credit score repair should be studied thoroughly. Properly managing credit over time still remains the best way to rebuild a bad credit record. If you have a bad credit score, you will need to get your credit history repaired. Below are some of the ways to help you improve your credit score.
  1. The repair of your credit score have to begin with the examination of your credit report. You can request for a free copy and check the document for erroneous entries. If there are errors like payments that are listed as late or incorrect amounts owed, you can dispute them with the reporting agency and the credit bureau.
  2. Your credit score is negatively affected by late payments, so make sure you are reminded of payment due dates. There are banks, utility companies and lenders that will send reminders through email or text messages. Automatic payment using the credit card system or bank debit cards is another way to keep up to date with bills payments.
  3. A considerable reduction in the amount of your debt will definitely improve your credit score. Using your credit cards only for important purchases is one way to reduce the amount you owe to creditors. Draw up a payment plan based on your credit report so that your available budget is utilized for payment of your most pressing debts and those charging the highest interest rates.
  4. Your payment history contributes 35% to the calculation of your credit score, so this item should be your main focus. When you are late in your payments, they are considered delinquent and negatively affect your FICO score. The length of time your debt has been paid after the due date is also calculated in your current credit score. The older the credit problem, the less they will affect your negative score but recent records of prompt payment will positively affect it. It is therefore better to pay for current liabilities on time than settle old debts if you want an improved credit score. Even if you pay off an old collection account, the bad credit report will stay on your record for 7 years.
  5. Amount owed contributes about 30% in the calculation of your credit score and is easier to deal with than your payment history. If you keep your outstanding debt low, you will have an improved credit score.

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