Smart Steps Toward Better Credit

You may have wondered how you might improve your credit score. And, in fact, asking the question “What can I do to fix my credit situation?” is certainly the first step to a better credit report and, ultimately, to an improved financial future. Hiring a credit repair law firm to ensure that creditors and credit bureaus haven’t violated your consumer rights is one way to begin, but there are a few other straightforward things you can do on your own to get started.

First, Pay Your Bills On Time
First, good credit means paying your bills on time. It may seem like common sense, but we can all get a little behind or forget what has been paid sometimes. A few ways to ensure timely payments:

  • Don’t procrastinate. Pay your bill before the due date.
  • Set up automatic online bill payments.

Second, Know Your Limits
As mentioned before, a revolving line of credit can do wonders for your credit score and your “better credit” agenda. However, credit misuse can also hurt your overall score if it is used ineffectively. Maxing out your credit cards or spending close to your limit will almost always hurt your credit score. For that reason, we recommended that you pay down your revolving balances as low as possible to keep the credit account working in your favor.

Third, Maintain a Good Credit Mix
Of course, a positive account history will practically always improve one’s credit score. In that regard, you may find it helpful to add a brand new account to your credit profile in order to demonstrate such financial responsibility. But what if a poor credit score makes it difficult to qualify? The key to unlocking this puzzle may well be acquiring a secured bank card that reports to the three national consumer reporting agencies. But what does this mean exactly?

First, a “secured” credit card is one whose line of credit is made safe (from the bank’s perspective) by a deposit you’ve made in advance. When such cards were first developed, the deposit had to equal the requested line of credit. So, for example, a $1000 deposit secured a $1000 spending limit on the credit card. During recent years, banks have adjusted their requirements such that lines of credit are often two or three times the secured deposit.

Second, don’t forget that when an account is reported to the three major consumer reporting agencies (Equifax, Experian, and TransUnion), the way you handle the account will certainly figure into your credit score going forward. Unfortunately, many secured credit card issuers don’t report to the credit bureaus, so be sure and ask the issuing bank before making application.

Repairing your credit is like any other lengthy process: Take it one step at a time. By identifying ethical and legal ways to clean up your credit in addition to paying down your debt, your credit score improvement efforts will make an even greater impact.