Improving a credit score can feel like a daunting task, especially after years of late payments, charge-offs, and other financial problems. To quote the famous saying, however, the journey of a thousand miles begins with a single step, and we have five steps that anyone can take today to start the journey back to good credit and financial stability.
Step 1: Know Your Due Dates
Paying bills on time is the easiest way to improve a credit score, and yet so many consumers don’t know when their credit card payments are due. If you don’t have a wall calendar, buy one and write out the due dates for all recurring payments and bills so that you have a visual reminder. If you have a smart phone, you can also schedule reminders on the day a bill is due.
Step 2: Know Your Debt and Know Your Lenders
Many consumers who are deep in debt don’t actually know how much they owe. Find out exactly how much you owe and put together a plan to pay it. If you cannot make a payment for any reason, call the bank or credit card company and explain the situation. Most lenders are willing to work out a plan, so long as you are flexible and still willing to pay what is owed.
Step 3: Read Your Credit Report
Consumers are entitled to one free credit report annually, so order a copy of your credit report and read it over carefully. Mistakes happen all the time on credit reports, and if there is a mistake on your credit report, then you can potentially improve your credit score by reporting the mistake to the credit bureau.
Step 4: Do Not Cancel Credit Cards
This is a common mistake that consumers make when they decide to improve their credit. They wrongly believe that having less credit cards will improve their credit score, but in reality, they are decreasing their available credit and lowering their credit score. If consumers want to lessen their dependence on credit cards, they should pay off their credit cards and only use them occasionally for small purchases, like coffee, that can be easily paid off each month.
Step 5: Consider a Secured Credit Card
Some consumers with poor credit or no credit are unable to establish good credit because they don’t have a credit card, mortgage, or auto loan to pay on time. Unlike the misinformed consumers in Step 4, they don’t have any credit cards to cancel because they can’t get approved for a credit card in the first place. For this particular group of consumers, the best option is to open a secured credit card through a bank, specifically a secured credit card that reports to the credit bureaus. Make payments to the card on time, and you will build a positive credit history and improve your credit score.
Looking for more credit tips, consumer alerts, and financial advice? Connect with My Credit Specialist online on Facebook, Twitter, and YouTube, and go to www.MyCreditSpecialist.com to learn more about credit restoration services and how they could help you!
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