The Death of Traditional Portfolios
For many Americans raising their credit score is the most challenging aspect of their personal financial strategy. By increasing your credit score, you gain access to better loans and improve the entirety of your financial outlook. But it’s certainly not easy. Here are a few of the major strategies that you can use to increase credit score and reduce your debt.
- Get Your Credit Limits Raised
Your debt-to-income ratio (the amount of money you carry as balance, compared to your actual credit line) is a large amount of your credit score. By getting your credit limits raised, you can reduce your debt-to-income ratio almost immediately. Many companies will increase your credit line at least a little if you’ve been prompt in your payments with them.
- Pay Any Past Due Amounts
Are there any items on your credit report from past debt? Maybe a utility bill that was never paid after service was canceled? Pay them off and request, on condition of payment, that the item be removed from your credit report. You should see your credit score go up quickly. Sometimes you can even settle your past due amount for a fraction of the actual balance.
- Correct Any Errors
The two most common errors on a credit report are incorrectly labeled late payments and incorrectly reported balances. Both of these issues are usually quickly fixed by writing to the reporting creditor in question with proof of the mistake. Sometimes banks will also remove late payments if they were unusual for your account.
- Take Care of Your Charge-Offs
Any accounts that have been charged-off, sent to collections, or involved a judgment or a lien still needs to be dealt with, unless it’s about to fall off your credit report. Most items will drop off your credit report in 7 to 10 years, but any communication regarding that account may reset the clock. If you have older items, you may want to wait for them to drop off. If they are more recent, it’s better that you settle them now instead.
If you want to improve your credit score, you should start now. Credit scores can take a while to improve, and require both hard work and persistence.
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