How to
Improve Credit Scores

The key to improving and maintaining good credit scores is understanding all the factors that impact the scores. 

1. Create a monthly budget to avoid overspending, make sure your bills are paid on time to avoid any future collections reporting.

2. Create a payment tracker to assist in making all payments on time. Just one new late payment can have a significant negative impact on the credit scores. At first, a late payment can lower credit scores 60 – 100 points and can remain on the report for up to 7 years. It has less of an impact as it ages.

3. Pay off unpaid collections or charge-offs. As long as the account remains unpaid and updates each month, it will continue to suppress the credit scores regardless of the good information reported. Just know that, by law, no one can attempt to remove accurate and verified accounts from the credit report.

4. Pay down credit card balances to below 30% of the credit limit. A lower utilization rate is even better!

5. If there is a lack of active accounts reporting, consider adding 1 or 2 credit cards (that report to all three credit bureaus) to help fuel your scores. You may need to obtain a secured credit card to achieve this. Again, the key is to maintain balances on all cards to less than 30% of the credit limit. 

6. Keep active accounts (especially credit cards) with good payment histories open for as long as possible. There may be an exception for high-interest loans.

7. Avoid applying for new credit unless necessary. Hard inquiries impact the credit score for 90 days. Multiple inquiries for car loans, mortgages, and student loans only count as 1 inquiry if done within a 30-day window.

8. Challenge or dispute qualified negative accounts with the credit reporting agencies. If the account in question is inaccurate, obsolete, or cannot be verified then it is possible for the reporting agency to remove the account from the credit report sooner than 7 years.