Facing and Repairing Your Credit Score: Part 1November 18, 2010
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As we continue our discussion of facing and repairing your credit score, below you will find a list of items you can do to help improve your score.
- Pay bills on time and more than the minimum required balance.
- Use credit regularly, but keep the balance low compared to the limit. It’s better to have two balances that are lower, than one that is closer to your limit. A rule of thumb is to keep the balance to credit limit at or under 35%. If you can’t get a credit card, purchase a prepaid credit card from a reputable issuer. This shows your ability to use a card and limit spending.
- Keep long term accounts open and limit the number of applications you apply for in a 12 month period.
- Piggybacking – or getting added as a joint account holder to accounts with good credit. This is actually a good idea for children who will be moving to college or out in the world soon. You have to add them as a joint account holder, not an authorized user. This will help your child establish credit.
- Stay away from finance companies that cater to the high risk lenders. These companies tend to offer financing at substantially higher rates and have additional fees. An example is a company that offers cash for your title on your car.
- Monitor the progress. Go to CreditKarma and join, it’s free. That web site pulls the score from TransUnion for free. It also has a cool feature that shows you what will happen to your credit score when you borrow more money.
Here is a link to the most frequently asked questions from the annual credit report website.
I hope this information helps you and provides you with a plan of action to tackle repairing your credit score. If you need additional help or have more questions, please feel free to contact me.