To improve your credit score can seem like an impossible task. The scoring model seems to factor in tons of information and makes it seem as if you have no control over your score.
This is wrong. You can focus on a couple easy steps and develop a good credit score.
1. Dispute and remove negative items on your credit report. This can be done yourself or you can hire a service to do it on your behalf.
2. If you have a bad credit item verified or delinquent account then pay them. Work out a payment plan and have them remove the negative credit item in exchange for your payment.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new credit line. This is best if it is a revolving line of credit, for example an unsecured credit card.
When you make your monthly payment you will be creating a positive payment history. This is a very large part of your credit score. If you have difficulties opening an unsecured credit card then get a secured card. Double check and make sure your credit card is reported to all three major bureaus.
Your score will get a bump if you can keep your balance at approximately 10% of your credit limit. This shows that you do use your credit and that you use it responsibly.
5. Pay off large debt. Your score will get a bump if you have high available credit to debt. The bureaus want to make sure you are not overextended and by showing them you have available credit your score will get a bump.
These are the only factors you should focus on when improving your credit score. There is one last tip that is surrounded in controversy.
6. Piggyback credit, this is when you are added as an authorized user to a good credit card account. The benefit is this account is now reported on your credit report.
This tactic has been widely abused by some credit repair services. The scoring model has changed to discount this method however it is disputed as to if that change has occurred or not.
In sum, focus on steps one through five and you are on your way to a 700 credit score. You don't have to live with bad credit you can increase your score and your quality of life.
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