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January 10, 2014

Steps to Improve Your Credit

A good credit profile, along with a high score, will help a consumer get the best rates on loans. Sadly, due to a poor economy and plenty of other factors, many have low credit scores. This is hard to improve, especially when a person does not have a lot of knowledge in the industry or what steps to take. However, with these four steps, one can increase their score in a few months to a year.

Where you stand: Before doing anything else, a person should know their credit score and what battle they face. To do this, a person should opt to buy their report from the three major credit bureaus. Then, he or she can find the negative and positives. In some cases, a person will have unpaid debts in collections. Other times, a consumer will need to open more credit lines and pay bills on time or a few months. Either way, when getting a full picture of one’s credit profile, it will be easy to follow the next steps.

Get current: The worst thing for a person’s credit score is delinquent payments. If a person is past-due with any creditors, he or she will not stand a chance to see their credit score rise. To fix this issue, one should contact the creditor and try to pay off the debt. Other times, when a consumer has a low income, he or she should, at least, make a payment or two so they can catch up. With this, a person will see a large bump in their score. If a consumer has a lot of money, he or she should try to negotiate the debts and make a one-time payment. Either way, when paying off delinquent items, one will go a long way in improving their score.

Fix any errors: Often, the credit bureaus will make mistakes. When this happens, a person may see their score suffer horribly. To fix this serious problem, a consumer should look more deeply at his or her credit report. Now, it is easy to find errors as many people have noticed. But, it is not always simple to contact the creditor and fix the problem. To do so, a consumer should contact the creditor by certified mail; then, a consumer should also contact the credit bureau. When providing the correct information, one can improve their score drastically and without much effort.

Open new lines: Now, depending on the situation, a consumer should open up a few lines of credit. This will help a person build their long-term credit profile. Simply put, when opening up a new card and using it for a few months, one should see a small jump in their credit score.

While it is no easy task, with these four steps, one will go a long way in improving their credit score. Remember, it will take time and a lot of hard work, but it is worth it in the end as it is beneficial to have a high credit score.

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