Whether you’re currently struggling with bad credit or have excellent credit and want to keep
it that way, it pays to care about your score. Bad credit can make it harder to find housing and
open new credit accounts.

7 Tips for Improving Your Credit Score

In some cases, it can even make it harder to get a job. However, good or excellent credit can open doors and make it much easier to get the things you need in life.

If your credit is bad or merely fair right now, things may feel bleak, but it’s not the end of the
world. There’s a lot you can do starting right now to turn things around and get that credit
score back up where you want it to be.

Here are a few examples.

1. Find out where you stand.

To create a solid action plan for improving your credit, you need to know what you’re
working with.

Request a current copy of your credit report. (You can obtain one from each of the three main credit bureaus once a year.) It will include a detailed history of your debt, available credit, and repayment habits.

Go over it carefully to make sure it’s free of any errors.

2. Dispute any errors you find.

Credit report errors can be as minor as a data entry typo or as significant as possible identity
theft. All of them can affect your credit, so it’s crucial to dispute anything you find.

This is especially the case with entries that have a high effect on your overall score, like payments reported as late that you know you made on time.

Once disputed, the credit bureau must investigate within 30 days.

3. Talk to your creditors.

If you’re having trouble staying on top of your bills, you might be reluctant to speak directly
with your creditors, but you shouldn’t be.

Many creditors are understanding and more than willing to work with you while you get back on your feet. Some even have programs in place for those going through temporary hardship.

If you can, get into the habit of communicating before there’s a problem, as with payments you know in advance you might be miss.

4. Stop adding to your balances.

Your payment history isn’t just an important part of how your credit score is determined. It
counts for 35 percent of it – over a third.

Rising credit card balances will only make it harder to stay on top of things, so it’s time to nix new credit card purchases. Start paying for things in cash instead and put what you can toward any past-due balances you owe.

The sooner you can get caught up, the more quickly your credit report will improve.

5. Pay off your cards (but don’t close them.)

Once you’re all caught up on any overdue payments, it’s time to work on paying down the
rest of what you owe.

Start with the smaller, more manageable balances, and then chip away at the larger ones. When you do manage to get one or more of your balances down to $0, avoid closing the accounts.

Available credit counts for 30 percent of your credit score and the length of your credit history counts for 15 percent more. Letting your accounts stay open with small to non-existent balances will actually help your score.

6. Avoid opening new lines of credit.

You should never open new credit lines unless you need them, even if you have excellent
credit. If your credit is poor or only fair, it’s even more important not to do so.

A new credit application will show up as a “hard inquiry” on your report. You want as few of these showing up at any one time as possible, especially when you’re working on repairing your
credit.

7. Stay on top of your score.

Once your credit’s on the mend, it’s essential to stay in the know when it comes to your
credit report. Checking your own credit to make sure your score stays healthy doesn’t harm
your report, so you can do it as often as you like.

You can even check credit score stats for free. The more you know about your credit, the better equipped you’ll be to keep it as healthy as possible in the future.

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