Credit score repair is a huge deal. There are companies professing to be able to boost credit scores and in some cases, they can. However, it's usually best to follow certain principles over a period of time that will lead to an increasing credit score. Using the five factors from our Credit Score Rating Scale, we've provided tips that will help you repair your credit score.
Payment History
- Pay bills on time. If a bill is due on the first of the month, don't pay it on the second. According to Fair Isaacs website, myfico.com, delinquent payments can have a "major negative impact on your score."
- Don't slip. Paying a bill on time one month and missing it the next month does you no good. If you aren't consistent with your payments, how will your score ever improve? Credit score ratings heavily favor someone who shows a consistent on-time payment history.
Amounts Owed
- Keep credit card balances to a minimum. If you can't pay a credit card balance down to zero, at least try to keep it to a low percentage,. perhaps around 30% of your you available balance.
- Don't open new credit cards to increase available credit. This won't help you to repair credit score and could actually lower it.
- Don't just move credit around to different cards. Your best bet is to pay down debt.
Length of History
- If your history is short, don't open too many new accounts too rapidly. New accounts have the effect of lowering the overall age of your accounts. Also, a heavy amount of account buildup in a short period can look risky with someone who has a short history.
New Credit
- Open new accounts responsibly. Pay them off on time and don't open too many rapidly.
- According to myfico.com, do your rate shopping in a focused period of time as length of time over which inquiries occur can matter.
Types of Credit
- Credit cards are your friend. They just need someone responsible to care for them. By establishing that you can handle credit and pay it on time, your can repair credit score. Someone without credit cards (or some sort of credit history) is viewed as a riskier option.
