The Credit Repair Tricks That Changed My Life

Before you can start improving your credit score, it's important to understand what goes into calculating it.

To better understand the factors that affect your credit score, it's important to review your credit report. You can get a free copy of your credit report from each of the three major credit bureaus once a year at AnnualCreditReport.com. 

Look for any errors or inaccuracies on your credit report and dispute them with the credit bureau if necessary.

You can also use credit monitoring services to keep an eye on your credit score and receive alerts if there are any changes. Some credit monitoring services also offer personalized tips and advice for improving your credit score.

Your credit score is determined by several factors, including:

• Payment history: This is the most significant factor, accounting for 35% of your credit score. Make sure you're paying your bills on time, as even one missed payment can have a negative impact.

• Credit utilization: This accounts for 30% of your credit score. Keep your credit card balances low, ideally below 30% of your credit limit. For example, if your credit limit is $5,000, try to keep your balance below $1,500.

• Length of credit history: This accounts for 15% of your credit score. The longer you've had credit, the better. If you're just starting out, it may take some time to build up a solid credit history.

• Types of credit used: This accounts for 10% of your credit score. Having a mix of credit types, such as credit cards, loans, and mortgages, can be beneficial.

• Recent credit inquiries: This accounts for 10% of your credit score. Try to avoid applying for new credit unless it's absolutely necessary, as each application can result in a hard inquiry, which can lower your score.

Paying down your credit card balances can help improve your credit utilization ratio, which is the amount of credit you're using compared to your credit limit. 

Ideally, you should aim to keep your credit utilization ratio below 30%. 

If you have multiple credit cards with high balances, focus on paying off the card with the highest interest rate first.

High credit card balances can be a major factor in a low credit score. Credit utilization ratio, or the amount of credit you use compared to your credit limit, accounts for 30% of your credit score. 

If your credit utilization ratio is high, it can indicate to lenders that you are relying too heavily on credit and may not be able to pay back your debts. 

Paying down your credit card balances is one of the most effective ways to improve your credit score quickly.

Here is what you can work with:

1. Determine your credit utilization ratio:

• Calculate your credit utilization ratio by dividing your credit card balances by your credit limits.
• Aim to keep your credit utilization ratio below 30%.

1. Create a budget:

• Identify areas where you can cut back on expenses and free up money to pay down your credit card balances.
• List all of your monthly income and expenses, and look for areas where you can reduce your spending.

1. Focus on high-interest credit cards:

• Pay off the card with the highest interest rate first.
• Make the minimum payment on all of your other credit cards and put any extra money towards paying off the card with the highest interest rate.

1. Consider a balance transfer:

• Move your balances to a new credit card with a lower interest rate.
• Be aware that many balance transfer credit cards charge a balance transfer fee.

1. Look for ways to earn extra income:

• Take on a part-time job, sell items you no longer need, or start a side business.
• Use the extra income to pay down your credit card balances more quickly.

For example;

Let's say you have three credit cards with the following balances and credit limits:

• Card A: $1,500 balance, $2,000 credit limit
• Card B: $3,000 balance, $5,000 credit limit
• Card C: $2,000 balance, $3,000 credit limit

To lower your credit utilization ratio, you could focus on paying off Card B first, since it has the highest balance and credit limit. 

Make the minimum payment on Cards A and C and put any extra money towards paying off Card B. 

Once you've paid off Card B, you can focus on paying off Card A and then Card C.

If you're struggling to find extra money to put towards your credit card balances, consider looking for ways to cut back on your expenses. 

You could cancel subscription services you don't use, cook at home more often instead of eating out, or shop around for cheaper insurance or utility providers.

If you can't pay down your credit card balances, consider requesting a credit limit increase. This can help lower your credit utilization ratio, as long as you don't increase your spending. You can typically request a credit limit increase online or by phone.

Let's say you have a credit card with a $5,000 credit limit and a $4,000 balance. You could request a credit limit increase to $8,000, which would lower your credit utilization ratio from 80% to 50%. 

However, it's important to be mindful of your spending and not use the increased credit limit as an excuse to rack up more debt.

Here is how to request a credit limit increase to improve your credit score:

1. Understand the benefits of a credit limit increase:

• A credit limit increase can lower your credit utilization ratio and improve your credit score.
• It can also provide more purchasing power and increase your creditworthiness.

1. Determine if you're eligible for a credit limit increase:

• Most credit card issuers have specific criteria for credit limit increases.
• Typically, you need to have a good payment history and a stable income.

1. Gather your financial information:

• Your credit card issuer may request information about your income, employment status, and expenses.
• Be prepared to provide accurate and up-to-date information.

1. Make the request:

• Contact your credit card issuer and ask about their process for requesting a credit limit increase.
• Be polite and explain why you want the increase, such as to improve your credit score or increase your purchasing power.
• If possible, make the request in writing to keep a record of the request.

1. Follow up on the request:

• If you don't hear back from your credit card issuer within a reasonable amount of time, follow up on your request.
• Be patient and persistent, and be prepared to provide additional information if needed.

Errors on your credit report can hurt your credit score. Review your credit report for any inaccuracies and dispute them with the credit bureaus. 

For example, if your credit report shows a late payment that you know you made on time, file a dispute with the credit bureau to have it corrected.

Don't know how to file a dispute? We have got you covered. 

How to dispute errors on your credit report to improve your credit score:

1. Obtain a copy of your credit report:

• You can request a free copy of your credit report once a year from each of the three credit bureaus.
• Review your credit report carefully and identify any errors or inaccuracies.

1. Gather evidence to support your dispute:

• Collect any documentation, such as receipts or statements, that show the error on your credit report is incorrect.
• Keep copies of all documents for your records.

1. File a dispute with the credit bureau:

• Contact the credit bureau in writing and explain the error on your credit report.
• Provide any supporting documentation and include a copy of your credit report with the error highlighted.
• Be clear and concise in your explanation of the error.

1. Wait for the investigation to be completed:

• The credit bureau has 30 days to investigate your dispute and provide a response.
• If the investigation results in an error being corrected, the credit bureau must notify all other credit bureaus.

1. Follow up on the dispute:

• If the credit bureau does not correct the error or provide a satisfactory response, you may need to escalate the dispute.
• Consider contacting the creditor or lender directly to try to resolve the issue.

If you have a friend or family member with a good credit history, consider asking them to add you as an authorized user on one of their credit cards. 

This can help improve your credit score, as long as the primary cardholder is responsible with their credit card usage. 

For example, if your mother has a credit card with a long history of on-time payments, being added as an authorized user can help improve your credit score.

These steps would help:

1. Find a creditworthy account holder:

• Look for someone who has a good credit history and is responsible with their credit accounts.
• This could be a family member, friend, or spouse.

2. Request to become an authorized user:

• Contact the credit card issuer and request to be added as an authorized user on the account.
• The primary account holder will need to provide your personal information and agree to add you as an authorized user.

3. Use the account responsibly:

• Make sure to use the credit account responsibly and pay off any balances in full and on time.
• This will help improve your credit score and also benefit the primary account holder.

4. Monitor your credit report:

• Regularly check your credit report to make sure the account is being reported correctly and not negatively impacting your credit score.

Maintaining a good credit score is important for financial stability and success. 

One of the most important factors in maintaining good credit is paying bills on time. Late or missed payments can have a negative impact on your credit score. 

Let's discuss how to set up payment reminders to improve your credit score.

Understand the Importance of Paying Bills on Time:

Paying bills on time is one of the most important factors in maintaining good credit. Late or missed payments can have a negative impact on your credit score. It's important to prioritize payments and make sure bills are paid on time.

Set Up Payment Reminders:

To make sure bills are paid on time, set up payment reminders. There are several ways to do this, including using a calendar, spreadsheet, or app. Set up reminders in advance of the due date to ensure payments are made on time.

Automate Payments:

Another way to ensure payments are made on time is to automate payments. Consider setting up automatic payments for bills that are the same amount each month. This can help ensure that payments are always made on time.

Prioritize Payments:

If you have limited funds, prioritize payments for bills that have the biggest impact on your credit score. This could include credit card bills, mortgage or rent payments, and car loan payments. 

By prioritizing payments, you can avoid late or missed payments that can negatively impact your credit score.

Monitor Your Credit Report:

Regularly check your credit report to make sure all payments are being reported correctly. If you notice any errors, dispute them with the credit bureau to have them corrected.

While having credit accounts can be beneficial to your credit score, opening new accounts can have a negative impact. 

When you open a new account, it can lower your average account age and increase your credit utilization rate. 

Let's why avoiding opening new accounts is important for maintaining a good credit score.

Understand the Impact of New Accounts: 

Opening a new account can have a negative impact on your credit score in several ways. When you open a new account, it can lower the average age of your credit accounts, which can have a negative impact on your score. 

Additionally, opening a new account increases your credit utilization rate, which can also lower your score.

Avoid Impulse Purchases:

One reason people often open new accounts is to make an impulse purchase. However, it's important to resist the temptation to open new accounts for this reason. 

Instead, consider saving up for the purchase or finding an alternative way to make the purchase without opening a new account.

Consider the Long-Term Impact:

When considering opening a new account, it's important to think about the long-term impact on your credit score. 

While a new account may provide short-term benefits, it can have a negative impact on your score in the long run. Consider the potential impact on your credit score before opening a new account.

Use Existing Credit Accounts:

Rather than opening new accounts, use existing credit accounts to build your credit. By using your existing accounts responsibly, you can improve your credit utilization rate and maintain a good credit score.

Let's say you are considering opening a new credit card account to take advantage of a sign-up bonus. 

Before doing so, you consider the potential impact on your credit score in the long run. You also check your credit report to make sure all accounts are being reported correctly. 

Ultimately, you decide to use your existing credit cards responsibly to maintain a good credit score.