The subject of this write-up is something that lots of people are constantly or rather permanently, grappling with. And, why not? A good credit score is a necessary ingredient to your ability to lead a happy life and access loans, mortgage, etc. at low interest rates, and even acquire a job. it is very easy to mess-up your credit score but improving it, though, is usually taxing as you have to invest yourself in a plethora of stuff – right from studying your credit report to contacting a credit restoration service in McKinney, Texas or wherever you live in the US, and taking comprehensive steps to extinguish your debt and build a fresh credit trail. Let us check out a few steps that you need to follow in this long, but cardinal expedition.
What’s Damaging My Credit Score?
Just as bad food injures your health, bad credit puts impediments in your life. Finding what is hurting your credit score is, therefore, the first step to improving it. The foremost step to achieving this is checking your credit report from all the 3 major credit bureaus and finding out elements that are damaging your credit score.
Negative Payment History: Get Rid of It Asap!
Delinquency is a blemish that is hard to remove from your credit report. Still, you need to get rid of it as quickly as possible. For this, you must clear all debt and ensure that all your accounts are up-to-date. In case you do not have any accounts left, you can always start by opening fresh accounts and gradually build your credit score from scratch. While this is not as easy as it sounds, avenues such as secured credit cards exist to help you tread the tough path of ‘rebuilding credit from scratch’.
Credit Utilization Ratio: Keep It Low!
One big reason why people end up with bad credit, is their propensity to use credit, usually for impulse and frivolous acquisitions. Honestly speaking, this can be the case with anyone and the more credit limit you have, the more you are likely to feel compelled to use it by charging your credit card. As a wise practice, always keep your credit utilization ratio below 30%. This means, regardless of the credit on your card or account, utilizing only 30% keeps you out of the red and is a good way of rebuilding your battered credit.
Old Accounts: Keep Them Active!
Many people choose to close all or some accounts under the false assumption that it will create a clean slate. You should not forget, though, that the length of your credit history contributes significantly to your credit score, an incredible 15% of FICO’s total score. If you keep your oldest accounts active and use them wisely, your credit score may improve easily. It is also essential to note that, the average age of all your accounts determines this equation and not just a single account. Owing to this reason, rushing to open new accounts is ill-advised and counter-productive.
Besides these steps, it is also important that you open a mix a credit accounts, and not just stick to one type of credit account. Assuming that you are able to manage all such accounts wisely, this is a great way to show creditors that you have a good history of handling different types of credit. In fact, the ‘types of credit in use’ contributes 10% of FICO’s credit score.
Repair My Credit Score 