There isn't exactly a "secret" to increase a credit score, but the key to increasing one’s credit score is being aware of the various aspects that affect the process of credit repair. An individual should get his credit reports from all three credit bureaus. The report should be scanned for mistakes and inconsistencies should be disputed. The dispute form should be accompanied with a copy of the credit report with the inconsistencies highlighted. A person is better served by following up on his credit report by himself instead of taking help from a third party.
One should be prepared to negotiate with creditors and collection companies regarding cancellation of debt upon complete payment and an assurance should be obtained that no negative entries will be added to the credit report.
It pays to be aware of credit items that are easy to repair and those that may be difficult. This information can help one chart out a process of systematically improving the credit score. Easy to repair credit items include late payments that have been settled, discharged bankruptcies, accounts that are more than 2 years old, and repossessions.
The secret, if any, is to do the basic things right and on time. These include paying off all payments by the due date, cutting down on expenses so that debts do not get out of hand, organize debts in such a way that the due dates are spread apart and file the bills and receipts carefully. Credit card balances should ideally be kept below 40% of the credit limit and one should resist the temptation of signing up for new credit cards or taking loans when not really required. This is because, such actions lead to enquiries on an individual’s report and this can have a negative effect on the credit score.
An individual should not change jobs frequently as staying in one place helps in establishing steady finances; a steady job also implies the ability to absorb the responsibility of paying off debts. Frequent job changes are difficult to explain and reflect poorly on a credit report. One should not switch credit companies frequently, an established relationship with a card company sends out positive signals to lenders regarding one’s seriousness in terms of money matters. Frequently changing credit cards and shifting from one lender to another makes one appear fickle and unreliable in the eyes of the money lender.
One should also keep creditors informed about changes that take place in one’s life; these include marriage, a new job, change of residence, etc. In fact, it is highly important that creditors be made aware of one’s current address otherwise there is a very real risk of one’s credit score falling down if creditors are not able to contact a debtor. Communicating with lenders and getting a late fee waiver from them also helps when one is trying to improve upon a credit score.
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