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How to Successfully Repair Your Credit All By Yourself

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Digging yourself out of a bad credit hole is something you can get professional assistance with, but you can also make significant improvements on your own. This guide provides helpful tips on how to spot credit repair scams, how to fix bad information on your credit report, how to boost your credit score and more.

In this guide

What is negative credit information?

Negative credit information is anything that causes creditors to consider you a riskier borrower, including late payments, accounts in collections, foreclosures, bankruptcy and tax liens. Once negative credit information is introduced into your credit history, you cannot remove it on your own. However, time heals all wounds. The longer it’s been since the negative information was introduced, the less it will affect your credit score. In time, negative information falls off your credit history.

This list details the length of time that negative credit information affects your credit score:

Late payments: Seven years
Bankruptcies: Seven years for completed Chapter 13 bankruptcies and 10 years for Chapter 7 bankruptcies
Foreclosures: Seven years
Collections: Generally, about Seven years, depending upon the age of the debt being collected
Public record: Generally, about Seven years, although unpaid tax liens can remain indefinitely (always pay the tax man first!)

Rather than despair over negative information, take action to improve your score.

The best way to improve your score is to have good behavior reported every  month. For example, you can apply for a secured credit card, which requires that you make a refundable deposit in exchange for a credit limit, typically at least $200. Then, use the card monthly. Charge no more than 10% of the available credit limit, and pay the balance in full and on time every month. Your credit score should improve as your negative information ages and your credit report fills with positive information.

How to spot a credit repair scam

Credit repair scammers prey on people who are desperate to remove negative credit information and improve their credit score. Engaging with these scammers won’t improve your credit and may also lead you into legal hot water.

The signs below indicate that a credit repair company is a scam:

  • The company wants you to pay before it provides a service.
  • The company recommends that you don’t contact any credit reporting agencies directly.
  • The company tells you it can get rid of negative credit information in your credit report, even if that information is accurate.
  • The company advises you to dispute all information in your credit report, regardless of its accuracy or timeliness.
  • The company suggests you create a new credit identity.

Companies that want you to lie about credit history or create a new credit identity can get you into legal trouble. Companies that provide “new” identifying information may use stolen Social Security numbers, and if you use this number, then you are committing fraud. Likewise, using an Employee Identification Number or Credit Profile Number provided by these companies is a crime. Rather than committing fraud, take the steps below to improve credit on your own.

Assess your credit history for free

You are entitled to receive one free credit report from each of the three major credit reporting bureaus (Experian, Equifax and TransUnion) every year. These credit reporting agencies keep detailed records of your credit history. Assessing your credit involves three simple steps:

  1. Download a free copy of all three credit reports.
  2. Review the credit report to find errors.
  3. Prepare a list of items you need to dispute.

Download free credit reports

AnnualCreditReport.com is a website sponsored by the three major credit reporting bureaus, and they are required to provide you with a full credit report every year. The first time that you assess your credit history, download a report from each of the major credit bureaus by following these steps.

Step one: Visit AnnualCreditReport.com and click on the “Request yours now!” link at the top of the page (in red) or the “Request your free credit reports” red box at the bottom of the page.

Step two: Follow the three-step instructions on the website. Download credit reports from all three bureaus, because a mistake may be listed only at one bureau.

Once you’ve filled out the form and requested reports from all three bureaus, you’ll answer some security questions and be directed to your report, one agency at a time. If the security questions trip you up, the website will lock you out of your report, but it will offer a phone number you can call to get your credit report via mail.

Keep in mind that you do not have to access all three credit bureau reports at the same time. If you prefer, you can space out this access over the year. So, for example, you can request a report from Experian in March, then TransUnion in June and Equifax in September.

After the bureau authenticates you, you’ll be directed to your credit report. In the next step, we’ll show you what you need to review.

Review your credit report

Review every credit reporting agency’s credit report in detail. Each report has the following sections: Credit Summary, Accounts (includes payment history), Inquiries and Negative Information. Reviewing each section can help you understand the source of a poor credit score, and if your report contains errors.

When you review your credit report, you will need to visit each section of your credit report, and keep notes about erroneous information. Remember, there are three bureaus, so you need to repeat this process for all three reports.

The next section details what you should should note.

Take notes

Accounts section
The accounts section contains a detailed history of all accounts (open and closed), your balance and your payment history associated with each account. You should be able to see month-by-month payment information for seven years of history. Each month will have a symbol next to it that indicates whether the account was paid as expected or if it was late.

Review each account, the balance and the payment history, and ask these questions:

  • Do you recognize all of the accounts on your credit report?
  • Are all your closed accounts noted as closed?
  • Does each account have the appropriate account balance listed?
  • Is your payment history accurate?

If you see missed payments that shouldn’t have been there, write them down. Your credit score is negatively impacted when you are 30 days or more past due. If you see a balance on a card that you haven’t used in years, it could be because the account has been stolen. Misinformation in the accounts section harms your credit score, so make a note of all of it.

For your own records, you should also take note of the following:

  • What is my current balance relative to my available credit (credit utilization)?
  • Do I have any open accounts that have associated late payments?

Resolving these issues can help you improve your credit score moving forward.

Credit inquiries

Credit inquiries are records of new credit for which you’ve applied. For example, if you apply for a new credit card, a car loan or a mortgage, you will see records of credit inquiries.

  • Do you recognize all the inquiries on your credit report?

If someone steals your identity and tries to apply for new credit in your name, an unrecognizable credit inquiry is usually the first sign of a problem. Make a note of any unrecognizable credit inquiries.

You will also want to take note if you see many credit inquiries where you did not receive the line of credit you wanted. Credit inquiries have a slight negative effect on your credit score, so if you’re applying for a lot of credit, you may need to slow down until your credit score improves.

Negative information

Negative information includes negative accounts, collections or public records. Negative information has the biggest impact on your credit score.

  • Do you recognize all of the negative information on your credit report?

If the negative information in your account is not accurate, you will need to contact the credit bureaus to correct it.

Negative information hurts your credit score, but as it gets older, the effect lessens. Take note of all accurate negative information, so you can follow our strategy to avoid it in the future.

Next steps

If all the information in your credit report is correct, learn how to monitor your credit score for free and how to improve your score.

On the other hand, if you don’t recognize all the information, you will need to take steps to remove incorrect information. And if your identity has been stolen, there will be even more steps required.

Resolve incorrect information on your report

Incorrect information appears on your report for four reasons:

  • Someone stole your identity and opened new accounts in your name.
  • Someone stole one of your existing accounts, and started using it.
  • The bank made an error and reported a delinquency or default that never happened.
  • A collection agency made an error and reported a collection item on debt that was never yours.

If someone stole your identity

Incorrect information due to identity theft is a serious issue that you need to resolve as soon as possible. These are some common signs of identity theft:

  • You don’t get your bills or other mail because someone has changed the mailing address on your accounts.
  • Debt collectors call you about debts that aren’t yours.
  • Medical providers bill you for services you didn’t use.
  • Your health plan rejects your legitimate medical claims because records show you’ve reached your benefits limit.
  • The IRS notifies you that more than one tax return was filed in your name.
  • You are arrested for a crime someone else allegedly committed in your name.

Warning: A common form of identity theft is when a family member steals your Social Security number and uses it to apply for credit.

You can start to resolve identity theft issues by visiting www.identitytheft.gov to report identity theft and get a recovery plan. This is an excellent, free website created by the Federal Trade Commission. In addition to reporting identity theft, you will receive a free action plan, and you’ll gain access to people who can guide you through the identity resolution process.

Below we detail some important action items you can take.

  1. Place a fraud alert on your account with the credit reporting agencies by calling each credit bureau (numbers below).
    • Equifax: 1-800-525-6285
    • Experian: 1-888-397-3742
    • TransUnion: 1-800-680-7289
  2. Put a freeze on your credit reports. A freeze blocks potential creditors from getting access to your credit report, making it less likely an identity thief can open new accounts in your name.
  3. Create an Identity Theft Report by submitting a complaint about the theft to the FTC and filing a police report.

If someone stole your account

If someone stole the account information of an existing account, you should immediately contact your bank or credit card company. Once you report your card as lost or stolen, the bank will typically reissue a new card and correct information on the credit report directly.

Dispute credit report errors

If you do not think you were the victim of identity theft, but believe there is incorrect information on your credit report, you can dispute the information directly with the credit reporting agencies. We will explain how.

Disputing incorrect information involves three steps:

  • Dispute the item online with each credit reporting agency.
  • Write a letter to each credit reporting agency, and keep copies of your correspondence.
  • Write a letter to each organization (bank, collection agency, credit union, etc.) that submitted incorrect information, and keep copies of those letters.

When you dispute incorrect information, you must keep a copy of your mailed correspondence in case the issue does not get resolved right away. Keeping copies of your correspondence will allow you to get help from the Consumer Federal Protection Bureau if necessary. Your dispute should include all of the following:

  • A copy of your report.
  • Specific information about what is incorrect.
  • Any documents that support your position.
  • An explicit request to remove or correct incorrect information.

If you need to dispute information, download the following step-by-step instructions and letter templates that will make disputing incorrect information as pain free as possible.

Download now

Reporting to debt collections agencies can be trickier, as collection agents are more aggressive in their tactics. The Consumer Federal Protection Bureau has a letter template you can use to make it clear that you do not owe the debt.

Download Letter Template Now

After you dispute the incorrect information, you will need to follow up to be sure  the information gets resolved.

If following the steps above seems daunting, some organizations specialize in paid credit repair services. Most of the services require a monthly subscription fee between $60-$100 per month, and most reviews report that the negative items are completely removed within three to five months. Despite the high cost, legitimate companies provide a valuable service if you’ve been the victim of identity theft and you want someone else to do the work for you.

Follow up on disputes

Once you register your dispute with the credit reporting agencies, they must investigate the item in question within 30 days, and they must forward all the relevant data you provide about the inaccuracy to the organization that provided the information.

If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit reporting companies so they can correct the information in your file.

When the investigation is complete, the credit reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. This free report does not count as your annual free report.

If you ask, the credit reporting company must send notices of any corrections to anyone who received your report over the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

What if my dispute isn’t resolved?

If an investigation doesn’t resolve your dispute with the credit reporting company, you can request that a statement of the dispute be included in your file and in future reports. You can also ask the credit reporting company to provide a statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service, and a dispute on your credit report does not improve your credit score.

Do I have any other options?

If you are unhappy with the way your case was investigated by the credit reporting agencies, you don’t have to give up. Instead, you can complain to the Consumer Financial Protection Bureau (CFPB).

When you complain to the CFPB, you can should provide copies of all of your correspondence to prove your case. The CFPB will reach out to the credit reporting agencies on your behalf and try to help get your situation resolved. At MagnifyMoney, we have worked with many people who have had good outcomes working with the CFPB.

Monitoring your credit score

In order to catch issues, and stay on top of your credit score, you should implement a credit monitoring strategy. You can monitor your credit for free with LendingTree, MagnifyMoney’s parent company. Keep in mind that LendingTree uses VantageScore, which is slightly different than the FICO score, although it has the same score range.

If you prefer more monitoring and additional credit protection, you can pay a fee for services that provide daily three-bureau credit monitoring, resolution assistance if your identity is stolen and insurance if you have to engage in a legal battle. This guide ranks the top identity theft protection services.

Whether you choose a free or paid version, credit monitoring is a great service. As soon as you detect suspicious activity, you can take action. The sooner you work to deal with issues in your credit report, the less the damage may be.

Improve your credit score

Once you resolve issues on your credit report, it’s time to implement a strategy to start improving your credit score. The single best thing that you can do to improve your credit score is to pay current accounts on time and in full every  month. You can picture it as burying negative information under a mountain of positive credit information.

Your top priority should be keeping accounts current. Continue to pay whatever account has the most positive information.

Your next priority should be keeping accounts out of collections. If you owe late payments, work to pay them back before the item goes into collections. Once these accounts are current, they will start to work positively toward your score.

Next, work on paying down your debt to provide positive information. Paying off installment credit (such as mortgages and car loans) will  also add good information to your credit report.

If you have no current accounts, consider taking out a secured credit card and using less than 10% of the available credit each month to add positive information to your report.

The last thing you should do is attempt to resolve debts in collections. Once an item is in collections, paying it off will not improve your credit score.

Going forward, take care to avoid taking on more debt than you can handle, and implement a strategy to pay down your debt quickly. Once you start making positive changes, your credit score should improve, and within a few years, you’re likely to have good credit and be a more desirable loan applicant.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Hannah Rounds is a writer at MagnifyMoney. You can email Hannah here

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Know About the Different Credit Scoring Models

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Did you know that there are hundreds of credit scoring models being used today?

With different lenders creating different credit score models based on their own credit criteria, it is very possible that you could have a hundred credit scores. While it is impossible to obtain or keep track of all your credit scores, you should be aware of the models most used by lenders.

FICO score

The FICO score is the most commonly used credit score when applying for credit or a loan. FICO is an abbreviation for Fair Isaac Corporation, the first company ever to offer credit scores. You have different FICO scores at each of the three major credit bureaus — Equifax, TransUnion and Experian. Your FICO Score ranges from 300 to 850, and is based on several factors:

  • 35% Payment History – The most important factor in determining your FICO credit score is your payment history. Delinquent payments could stay on your report for seven years.
  • 30% Debts/Amounts Owed – Your total debt. The lower your debt, the more likely it is that your score will be higher.
  • 15% Age of Credit History – The longer your credit history, the more likely it is that your score will be higher.
  • 10% New Credit/Inquiries – The number of accounts you have opened recently, as well as the number of hard inquiries you have.
  • 10% Mix of Accounts, Type of Credit – The more varied your accounts, the more favorable your score.

However, the FICO model is not as simple as the above breakdown may seem. FICO often makes changes to its credit score model to make it a better reflection of how creditworthy individuals are. As a result, there are currently more than 50 FICO credit score models that are used for different types of debt. A different version of your FICO credit score is used for a mortgage, auto loan, credit card and more.

The latest version of the FICO score is FICO 9, which allows unpaid medical bills to carry a lower weight than other unpaid debts, disregards collections accounts that have been paid off in full and factors in rent payments that are reported.

FICO 9 was developed because unpaid medical debt may not be an indicator of financial health, as an individual may be waiting on insurance payments before paying the debt, or may not even know a bill has been sent to collections.

FICO score 8 is still the most commonly used by lenders. This model does not allow for the lower weighting of medical debt.

Consumers should also be aware of the newly launched UltraFICO Score. This score is the result of a partnership by FICO, Experian and data aggregator Finicity.  The key difference between it and other FICO scoring models is that it allows bank account transactions to be factored into the final score. This is a score for which consumers will have to opt in by linking their deposit accounts to their credit profiles. This can help consumers with a sparse credit history to boost their scores based on their banking behavior, which includes a history of positive account balances, frequency of bank transactions, length of time the accounts have been open and evidence of consistent cash on hand.

As this is a very new feature, there will be a slow rollout of availability. You can sign up here to receive news and updates on the UltraFICO score.

VantageScore

VantageScore is the main FICO credit score competitor, and in a similar manner, the VantageScore is constantly evolving to portray a more accurate picture of a person’s financial health. It was developed by the three major credit bureaus. While still not as widely used as the FICO score, an October 2018 study by consulting firm Oliver Wyman found the use of VantageScore rose over 20% year over year, and was up more than 300% over the past five years. Like the FICO score, VantageScore has a scale of 300-850.

  • VantageScore 4.0 was designed with these changes in mind, and it gives those records less negative impact when calculating scores for consumers who have those records in their credit files. VantageScore 4.0 also penalizes unpaid medical collections less than other types of unpaid collections, and ignores unpaid medical collections less than six months old, to give insurance companies ample time to make payments. Consistent with the VantageScore 3.0 model, paid collections (including paid medical collections) are excluded in the VantageScore 4.0 model.

The most recent version is VantageScore 4.0. As is the case with FICO score 9, VantageScore 4.0 puts a lower weight on unpaid medical debt (medical debt less than six months old is completely disregarded). Both VantageScore 3.0 and 4.0 exclude paid collections from their model.

While VantageScore 4.0 debuted in 2017, 3.0 is still the most widely used model. The score takes the following factors into consideration:

  • Extreme Weight: Age and Type of Credit – This refers to your length of credit history and your account mix, and is also factored heavily into your 3.0 score.
  • Extreme Weight: Credit Utilization – The V3 score calculates your utilization percentage by dividing your balances by your available credit. Generally, you should keep your utilization under 30%.
  • High Weight: Payment HistoryVantageScore uses your payment history as the number one predictor of risk. Late payments can appear on your report for seven years.
  • Medium Weight: Total Balances – Refers to your total debt, both current and delinquent. As with credit utilization, the more you lower your debt, the higher chance you have of increasing your score.
  • Low Weight: Recent Behavior – How many accounts have you recently opened? Your recent behavior includes newly opened accounts and the number of hard inquiries recently.
  • Extremely Low Weight Available Credit – The amount of credit you have available to use.

MagnifyMoney’s parent company, LendingTree, offers a free credit monitoring service that uses the VantageScore 3.0 model.

Where can you obtain your credit score for free?

It used to be pretty difficult to obtain your credit score across all three bureaus for free. Now, several financial institutions offer consumers the chance to obtain their FICO scores at no cost.  Here is a sampling of banks and credit unions that offer this service:

For Experian: If you have an American Express card, a Chase Slate account, or a credit card with Wells Fargo or the First National Bank of Omaha, you can get your FICO score from Experian. Discover offers an even better service, as anyone can sign up to view their Experian score at Creditscorecard.com, even if they do not have an account with Discover.

For Equifax: If you have a Citibank card, or an account with DCU Credit Union or PenFed, you can access your Equifax score for free. Keep in mind that Citibank uses a scoring model from 250 to 900 based on Equifax and the FICO Bankcard Score 8 model, which emphasizes credit card behavior.

For TransUnion: If you have a Barclays card, select credit cards with Bank of America or a Walmart Credit Card, Walmart MasterCard, or Sam’s Club Credit Card, you can access your TransUnion score.

Knowledge is power

The credit scoring system has a long way to go before it becomes transparent and accessible. Currently, it is up to lenders to use a national score, like the FICO score, their own internal credit score, or a mix of the two.

While it would be impossible to monitor all of your credit scores, there are ways to monitor the most important factors in every score. It’s your right to get annual access to a free copy of your credit report from each of the three bureaus. You can do this at annualcreditreport.com.

Even though no lender uses the same credit score model, all scores look at the same basic information, so taking steps to build and keep strong credit will benefit you no matter which score is being used.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Gretchen Lindow
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Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at [email protected]

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What Factors Affect Your Credit Score?

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The 5 factors that determine your FICO score
There are five major components FICO uses to determine a credit score. Understanding the secret sauce can help you build a strong score and healthy credit report. While FICO is not the only credit scoring model out there, it is the most widely used by lenders. So a score in the 700s, along with a healthy credit report, should enhance the rest of your financial life by enabling you to get approved for top-tier financial products at a lower interest rate.
Here’s everything you need to know about the five pieces of the FICO-scoring pie.

35%: Payment history

This is the single most important part of your credit score. Quite simply, this looks at how many on-time payments you make. You will:

  • Get rewarded for on-time payments.
  • Be punished for missed payments. Not all late payments are created equally. If you are fewer than 30 days late, your missed payment will likely not be reported to the bureaus (although you still will be subject to late fees and potential risk-based re-pricing, which can be very expensive). Once you are 30 days late, you will be reported to the credit bureaus. The longer you go without paying, the bigger the impact on your score, so 60 days late is worse than 30 days late. A single missed payment (of 30 days or more) can still have a big impact on your score, shaving off anywhere from 60 to 110 points.

If you don’t pay a medical bill or a cell phone bill, your account may be referred to a collection agency. Once it’s with an agency, they can register that debt with the credit bureaus, which can have a big negative impact on your score. Most negative information will stay on your credit report for seven years. Positive information will stay on your credit bureau forever, so long as you keep the account open. If you close an account with positive information, it will typically stay on your report for about 10 years, until that account completely disappears from your credit report and score. If you don’t use your credit card (and therefore no payment is due), your score will not improve. You have to use credit in order to get a good score.

However, there is a big myth that you have to borrow money and pay interest to get a good score. That is completely false. So long as you use your credit card (it can be a small charge) and then pay that statement balance in full, your score will benefit. You do not need to pay interest on a credit card to improve your score. Remember: Your goal is to have as much positive information as possible, with very little negative information. That means you should be as focused on adding positive information to your credit report as you are at avoiding negative information.

30%: Amount owed

This part of your score will look at a few elements:

  • The total amount of debt you owe across all of your accounts. If you have a lot of credit card debt, your score can be hit.
  • In addition to the total amount of debt that you have, your utilization is very important.

To calculate utilization, divide your statement balance (across all of your credit cards) by your available credit. For example, if you have credit limits of $40,000 across four credit cards, and you have a total balance of $20,000 – then you have a utilization of 50%. That is high, and a high utilization rate is not good.

To have a good utilization score, you will want your total to be below 30%. However, the lower the, the better, so aim as low as possible here.

Why is utilization such an important concept? If you use every bit of credit made available to you, then it looks like you do not have self-restraint. Maxing out all  your credit cards is a big warning sign to lenders.

If you are able to restrain yourself and have a lot of available credit (that you do not use), then you are showing self-discipline.

It may sound strange, but one key to having a good credit score is having a lot of available credit and not using most of it.

15%: Length of credit history

This is the easiest part of the credit score to get right. So long as you don’t close accounts, every day this part of your score improves (because all your accounts become one day older).

FICO will look at the age of your oldest account, as well as the average age of all accounts. Closing a long-time account can ding your score if it shortens the length of your credit history.

10%: Types of credit in use

If you have experience with different types of credit (installment loans, revolving loans, credit cards, etc.), it’s better for your credit score than if you don’t have a variety of experience.

The most important product is a credit card. If you have a credit card and manage it well, you will be rewarded.

Other forms of debt that will affect your credit score include your mortgage payment, auto loan payment and student loan payments. These fall under the category of installment loans, rather than revolving credit, like a credit card. A varied credit history will include both revolving debt and installment loans.

10%: New credit

If you open up a lot of new credit in a short period of time, you will be sending a warning signal to the credit bureau. But this aspect of the credit score has inspired some unwarranted fear in some people. They are afraid to shop for the best deals, because they are afraid of what shopping for credit would do to their credit scores.

The FICO score will look at credit inquiries from the past 12 months. Lets break a few of the myths down now:

  • Checking my own credit report will hurt my score: FALSE! If you check your own credit report at www.annualcreditreport.com, it will not hurt your score. You can get this report for free across all three major credit bureaus once every year.
  • If I shop around for a good mortgage or auto loan rate, my score will get crushed: FALSE! Multiple inquiries for a mortgage or auto loan are usually treated as a single inquiry.
  • If I shop around for a balance transfer credit card, my score will get crushed: FALSE! If your score does decline, it probably will not decline by much. You can expect 10 to 20 points shaved off per credit application. But remember: You can apply for a balance transfer to help reduce your balance faster. When you open a new credit card and transfer your balance, you will be able to:
    • Have a lower overall utilization rate, because you have new credit available (and of course you will not use all of it!)
    • Pay off your debt faster, because the interest rate is lower. At the end of 12 months, your score should be even higher than when you applied for the balance transfer or personal loan.

Remember, too, that you can check to see if you have prequalified for any credit cards without triggering a hard pull on your credit (this means it will not appear on your credit report).  This is a great way to shop around for cards you are more likely to be accepted for without risking any kind of ding to your credit score. Keep in mind, though, that when you actually apply for the card, there will be a hard pull of your credit history, and your application is not guaranteed to be accepted. But overall, you shouldn’t fear applying for new credit — it’s more likely to help your score over the long run, even if there is a short-term ding.

One exception is when you are aiming to get a mortgage; if this is the case, you should hold off on applying for new credit, because any small change in your credit profile can cause problems with getting a mortgage loan.

Quick steps to building and keeping a good credit score

  • Use your credit card every month, but keep your utilization at least below 30%, and even less if possible. In other words, never charge more than 30% of your available credit, and aim to charge a lot less. You can reduce your utilization by (a) paying down your debt and (b) increasing the credit that you have available.
  • Make your payments on time every month. If you repeat these two things over time, you should eventually have a score above 700. However, if your score is below 700 and you want to improve it, you need to focus on:
  • Adding more positive information to your credit report
  • Getting your utilization below 30%
  • Dealing with the negative information

Where can I monitor my credit score for free?

There are several ways to get your FICO score for free, from the three main credit bureaus. Here are just a few:

  • If you have a Citibank card, or an account with DCU Credit Union or PenFed, you can access your Equifax score.
  • If you have an account with American Express, Discover, Wells Fargo or First National Bank of Omaha, you can access your Experian score for free. You don’t even have to have a Discover card in order see your Experian score; you can simply sign up at Creditscorecard.com. 
  • If you have any Barclays credit card, you can gain free access to your TransUnion score.  Bank of America offers access with select credit cards, and you can also view your TransUnion score if you have a Walmart Credit Card, Walmart MasterCard or Sam’s Club Credit Card.

There are also several services that offer free regular credit monitoring. MagnifyMoney’s parent company, LendingTree, offers free credit monitoring for anyone who wants to sign up. You’ll have access to your credit score and receive alerts to changes you should be aware of. You should know that LendingTree uses the VantageScore model, which is slightly different from the FICO score, although the score range is the same.

 

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

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