Ways to Repair Your Credit Score
ways to repair your credit score steps to get your credit rating back towards 720 we all know the value of a good credit score we all try to maintain one sometimes though life throws us a financial curveball and that score declines what steps can we take to repair it reduce your credit utilization ratio your credit utilization ratio curve is the percentage of a credit cards debt limit you have used up simply stated if you have a credit card with a limit of 1,500 dollars and you have $1,300 borrowed on it right now the curve for that card is 87% carrying lower balances on your credit cards tilts the cur in your favor and promotes a better credit score review your credit reports for errors you probably know that you are entitled to receive one free credit report per year from each of the three major u.s.
Credit reporting agencies Equifax Experian and TransUnion you might as well request a report from all three at once as the federal government's Consumer Financial Protection Bureau notes you can do this at annualcreditreport.com about 20% of credit reports contain mistakes upon review some borrowers spot credit card fraud some notice botched account details or identity errors at its website the CFPB offers sample letters and instructions you can use to dispute errors behavior makes a difference credit card issuers lenders and credit agencies believe that payment history paints a reliable picture of future borrower behavior whether you pay off your balance in full whether you routinely max out your account each month the age of your account these are also factors affecting that portrait think about getting another credit card or two your cur is calculated across all your credit card accounts in respect to your total monthly borrowing limit so if you have a $1,200 balance on a card with a $1,500 monthly limit and you open two more credit card accounts with $1,500 monthly limits you will markedly lower your cur in the process there are potential downsides to this move your credit card accounts will have lower average longevity the issue of the new card will of course look at your credit history think twice about closing out credit cards you rarely use when you realize that your cur takes all the credit cards you have into account you see why this may end up being a bad move if you have five thousand five hundred dollars in consumer debt among five credit cards that all have the same debt limit and you close out three of them accounting for one thousand three hundred dollars of that revolving debt you now have four thousand two hundred dollars among three credit cards in terms of ker you are now using a third of your available credit card balance whereas you once used a fifth beyond that fifteen percent of your credit score is based on the length of your credit history how long your accounts have been open in the pattern of use and payments per account this represents another downside to closing out older little used credit cards alternative credit scoring systems have also emerged if your credit history has taken a big hit or is spotty they may end up helping you out TransUnion x' credit vision link the LexisNexis Risk View score and the FICO XD – and ultra FICO scores compiled by Fair Isaac company FICO are examples they introduced new scoring criteria for borrowers who may be credit worthy but lacked sufficient credit history to build a traditional credit score or need to rebuild the scores cell phone payments cable TV payments property records and other types of data are used by these systems in order to set a credit score you
