A Guide to Improve Your Credit Score on Your Own

Posted by Nikitas Tsoukalis on June 30, 2017

A Guide to Improve Your Credit Score on Your Own

If you are planning to buy a home in a couple of years, applying for a mortgage must be there in your mind. Other than your monthly income, the two major factors that can decide the type of house you can buy are down payment and rate of interest. Both of these are linked to one thing – your credit score.

Improving your credit score has many benefits. But can you do it your own? Yes. This article will guide you on how to fix your credit score yourself.

Understand your credit score

You first need to understand what the constituents of your credit score are. The following table will help you understand that:

Improve Credit Score
NoCategoriesDescriptionWeight (%)
1.

Payment History

It contains the history of the payments you make to your banks/lenders

35

2.

Credit Utilization

The debt you are carrying with respect to your credit limit

30

3.

Length of credit history

The length of time you have had a credit account

15

4.

Types of credit

The different varieties of credit you have

10

5.

Credit Inquiries

Number of Inquiries done by a lender/creditor

10

Get your credit report

You can get your credit score once a year for free from each of the three credit rating agencies. To get this report you need to visit the website AnnualCreditReport.com. Credit scores are calculated using this data. Note that this report does not contain your credit score, but has all the other information that you will need to improve your credit score.

Review your credit report

Once you get this report, go through all the details it contains line-by-line. It may contain some information that you find incorrect. You can use a highlighter to mark that information.

Resolve discrepancies

When a credit report arrives, you will find some instructions along with it that you will need to follow if there’s a dispute. You should mail them relevant data that you have. Credit bureaus usually take 30 to 45 days to investigate and respond to your dispute.

You can also send this information to the bank/lender who had listed the concerned information on your report. They are also legally obliged to investigate on your request. Keep paper trails of these conversations with you. These paper trails can be helpful to you in your subsequent course of action.

Note: If you find something you cannot relate to and are completely unaware of, you could be a victim of Identity theft. To report such incidences, you should visit the website IdentityTheft.gov.

Ways to improve your credit score

If you’re wondering how to fix credit score on your own, here are a few tips for you:

  • Try to keep your credit utilization under 10% of its limit.
  • Pay all your bills/installments on time.
  • 3.Get different types of credit viz. installment type (i.e. mortgage, car loan) and revolving type (credit cards and lines of credit)
  • Don’t close your good credit card; this will hurt your credit utilization and consequently your credit score.

If you cannot get a credit card, you can apply for secured credit card and keep a good credit history on that account. This will improve your credit score. Once negative information gets into your credit report it will take 7 years before it will get off.

You cannot drastically improve your credit score within 30 days. It is important to follow good credit habits. If you take the above-mentioned measures, it will surely help you to build a good credit score.

To get professional help on improving your credit score, you can contact Keycreditrepair.com and get a free consultation.