Do-it-Yourself credit repair to improveyour credit score takes a conscious effort on your end. There are several factors that affect your credit score; improving the score requires you to take care of the most important of those factors so that you can manage your credit better, and improve your score. Follow some simple steps to improve your score and your credit history.
Improve your payment history:
- Avoid making late payments on your bills.
- Pay off all your past-due bills as soon as possible.
- Request an alternative plan with low monthly payments from your creditor if you need help.
- Negotiate with your creditors to remove charge-offs from your report and re-open those accounts.
- Request that your creditors erase late payment entries after you re-start paying on time.
Reduce your outstanding debts:
- Pay off high interest debts first.
- Keep your balances low and try to keep your revolving debt to 50% of your available credit.
- Don't close old and unused accounts quickly in order to lower your available credit. It will raise your debt-to-credit limit which has a negative impact on your score.
- Try to close accounts gradually over several months.
- Verify that the accounts closed are reported as "closed by consumer".
Improve Your Credit History:
- You should not open several new accounts within a short period of time.
- Adding too many accounts in a short interval implies that you are not able to manage your credit properly.
Manage new credit efficiently:
- Restrict yourself to a medium credit limit and not a higher one as your creditor suggests.
- Do not open too many new accounts if you have gone through credit problems in the past.
- Plan your budget taking into account your finances and credit.
- Avoid several credit inquiries within a short period; otherwise it would mean that you are about to open multiple new accounts and this will affect your score.
Use a proper mix of credit:
- It is better not to have too many installment loans as they can reduce your score. This is because the payments remain unchanged until you pay off the balances.
- You can have a combination of credit cards and installment loans or loans with fixed payments as they help in improving your score. But you need to handle your credit cards efficiently.You can also contact a credit counseling agency for tips on managing your debts. These agencies are different from the credit repair companies and they can guide you on how to improve your financial situation.
Once you have worked through the various factors influencing the credit score, try to maintain a stable credit report with the latest details. Check your credit report periodically for errors and problems. A few simple steps will help you in this regard.
- Request your creditors to send your account details and payment history to the credit reprting agencies.
- Create a savings account at your bank. Your creditors will be convinced that you have started to save and maintain extra funds to pay down your debts.
Besides practicing good payment habits and updating your credit report, you should look at removing any errors from your report. This will also help you to get a better score. When you request your credit report, the credit bureau will give you detailed instructions on how to file a dispute. Do so right away if you find errors.
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