How can you improve your credit report and score with right options?

Your credit report and score determine if you can obtain a mortgage or get a job. Therefore, it's important to understand the various aspects of credit, what it actually means and how you can improve it through the following options.

Credit Counseling

Credit counselors help you improve credit in the following 3 ways:

  1. Manage your budget and debts
  2. Offer tips to improve credit
  3. Arrange payment plans to avoid bankruptcy

Apart from that, certified credit counselors also offer free education materials on how to improve credit.

More on credit counseling

Credit Counseling
repair your credit

Repair your credit

When it comes to improving your credit life, the first thing you need to do is start the credit repair process immediately. The path to credit repair isn't that difficult one, but only a patient man can walk on it. The magical three-digit number can't be increased within 24 hours. It'll take some time to get the desired result.

How to repair your credit

Pay off credit card debt

This is easier said than done, but eradicating your credit card debt is going to be an immensely satisfying achievement. It'll not only be good for your credit score but also for your overall financial life. Try to reduce your high interest debts and create a budget to make minimum payments on your other credit cards.

Tips to pay credit cards

pay off credit card debt
pay your bills on time

Pay your bills on time

Sometimes, it is tough to pay bills on time when you don't have enough money. Fortunately, bill consolidation helps you pay your bills on time without taking too much pressure upon yourself. You can easily take care of your monthly bills by consolidating them into one simple and affordable bill with the help of a consolidation company.

Learn more on bills

Check your credit report

Its bad enough to be penalized for the mistakes you did in the past, Obviously, you don't want to suffer for the mistakes you didn't commit. Check out your credit report and correct the errors you find in every section.

Sample credit reports

check your credit report
Negotiate with creditors

Negotiate

Missed payments and delinquent debts can ruin your credit life. If you're facing problems in paying off debts, then work out a reasonable payment plan with your creditors. Fax letters to negotiate and deal with creditors smartly.

Sample negotiation letters

4 Unknown tips to increase your credit score

1. Make periodic payments:

Try to make multiple payments on your bills. You should make payments on your bills every week. This will help you lower the credit balance on the bill statement date. In short, it will enable you reduce your credit-utilization ratio and improve your credit score. So, if you make purchases with your credit card everyday, then you must pay the bill by the end of the week.

2. Go for "Pay for Delete" agreement:

If your credit account has been assigned to a collection agency, then you can negotiate a pay for delete agreement with them. You can inform the collection agency that that you are ready to pay off the debt in full only on the condition that they would remove the negative item from the credit report. However, you should get the agreement in writing or the collection agency may refuse to delete the item from the credit report after the debt has been fully repaid.

3. Send a Goodwill letter your creditors:

Do have only 1-2 negative items on your credit report? If yes, then it is possible to get them removed from your credit report through a Goodwill letter. If you are a responsible consumer who have made 2 late payments on a credit card recently due to some unavoidable circumstances, then you may request your creditors to remove the negative listings purely on goodwill. You can send a Goodwill letter to your lender and request them to delete the bad items from the credit report. Once these listings are wiped out from your credit report, your score will go up. However, if you are always late on your bill payments, then the lenders will not delete the items from your credit report.

4. Avoid short sale:

In a short sale, lenders consent to settle the mortgage loan debt for less than the original loan amount. For example, your total loan balance is $350,000. You trade your home for $240,000. This means that the total deficit balance is $110,000. Henceforth, lender will report the deficit amount on your credit report.

Last Updated on: Wed, 30 Sep 2020