If you watch TV, surf the internet, or read the daily newspaper you have seen credit repair services advertised by the dozens. After reading these ads you probably are wondering if your credit score can really be raised with no cost involved. Well believe it or not the answer to that question is YES, you can raise your credit score without any cost. And how would you go about doing this, well the same way that a paid credit repair service would do it. You can use the exact same techniques and you will not have to spend a nickel to get it done. Here is how to do it:
Make Your Payments On Time
If you have fallen behind with your monthly payments it will be very important for you to get your account caught up, this will be beneficial due to your accounts will be reported as current with the major credit bureaus. If you are way behind on your payments all is not lost, there are many creditors that will work with you to split your payments into smaller monthly payments to assist you in getting caught up. If you feel this is something you need to do you will have to contact them and work out a new payment schedule.
Raise Your Credit Limits
Another technique to raise your credit score is to increase your total available credit, by applying for new credit or asking for your current credit accounts to raise your credit limits. An example would be if your existing available credit is $8,000 and you owe $5000, this will have a negative impact on your credit score because you owe more than half of you available limit. So if you can get an increase up to say $11,000 then you would owe less than 50% of you available credit, which will immediately raise your credit rating.
Reduce Your Existing Balances
An additional technique to raise your rating is to pay down the accounts with a high balance, and high interest rates. This may be difficult in the beginning, but concentrate on getting each account paid down to less than 50% of the total credit available. If all you credit cards are maxed out then creditors will see you as a credit risk.
Do Not Close Older Accounts
The longer an account is open then the better your credit score will be. By closing older accounts you will actually decrease your credit score, this is due to your credit history will seem like it is newer than it really is. The longer you have had a credit history the better your chances are to obtain additional credit.
Apply For New Accounts At The Same Time
If you apply for multiple credit cards then you will usually have multiple credit checks that go along with them. If you apply for the new accounts at the same time then this will only count as one credit inquiry. This method can be used to combine your applications and avoid the ding to your credit score you would have had if you had applied over a period of time. Most credit checks drop off after 6 months, but if you need to improve your credit score quickly you may want to try and have older inquiries removed.
Check Your Credit Reports Regularly And Often
If you are thinking about ways to raise your credit score, you will want to put this tip at the top of your list. Be sure and review you credit profile on a regular basis and dispute any bad information or errors with the credit bureaus. You may find credit checks that do not belong on your reports; you need to ask that they be removed. Any closed account should be reported as “closed by consumer”, and then check any old accounts or collections that have gone past the proper time limit for reporting. The allowable time limit for reporting credit problems is 7 years, from time to time debt collectors and creditors will continue to try and report old debts.
Now that you have been made aware of these simple and free ways to increase your credit rating, be sure and utilize these ideas and take advantage of these simple but very effective strategies. You will be able to raise your credit score, clean up your credit profile, and decrease your debt all at the same time.
for more information about raising your credit score, debt reduction, and other personal finance tips go to: finance tips 101 your personal finance blog
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