Low or mediocre credit scores can be a result of many different situations. Having to skip a bill payment due to financial problems, forgetting to send in a loan payment, or even missing late payment notifications due to a change in address can all lead to drops in credit score. There are some steps and tactics that can help raise a credit score to good or excellent levels.
It is first important to closely examine a detailed credit report that shows not only the score but any delinquent accounts, records of late payments, and other details that may be causing the score to drop. These can be obtained from credit reporting agency websites, some of which are government mandated to provide a free report at least once a year. Getting a clear idea of how much credit and liability exists can help determine a plan of action to raise a credit score.
Check for discrepancies on a credit report; if a credit card or other lender has reported a late payment when there is proof to the contrary, contact both the lender and the reporting agency to correct the mistake. If late payments are the result of a dispute, it is important to try and find out if the credit report can be amended once the dispute is repaired. It is a mistake to think that lenders and reporting agencies are infallible; checking for mistakes and taking prompt action to have the report amended can help raise a credit score.
The biggest way to raise a credit score is to pay debts on time and pay down existing debt. It may take a few years of accurate repayments to undo the damage to a credit card score, but it is truly the only way to eliminate credit issues. If payments are late because of forgetfulness, rather than lack of funds, see if options exist to allow automatic monthly payments through a bank account. Ensuring that debts are paid on time will help establish a reputation as a reliable customer, which may come in handy if there is ever a dispute.
Paying down credit card debt may be helpful when trying to raise a credit score, but some financial experts suggest getting a credit line increased as a means of boosting low scores. If a credit card is maxed out, this tends to reflect poorly on scores. Credit cards that have a reasonable balance below the limit, however, usually have a neutral effect on credit. The key factor in this strategy, of course, is to avoid spending the additional credit if it is approved.
