• Alan Bermudez
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    Improving your credit score is almost like losing weight: it takes small, consistent steps… and patience! Stick with the right actions (and avoid the wrong actions) and you WILL improve.

    The best way to fix your credit is to manage it sensibly over time with solutions you implement today! (Yes… TODAY!)

    The first step in fixing your credit score is to find out where you stand. You may obtain a copy of your credit report from : Experian, Equifax and TransUnion. These companies are required to provide you with a free copy at your request, once per year. With your credit report in hand, consider the suggestions mentioned below to ameliorate your credit. They take less than 30 minutes to implement.

    #1. Check Your Credit History Report

    Your credit report contains a detailed history of all credit related transactions such as credit card and loan payments, loans you have borrowed, etc. Go over your credit report with a fine tooth comb to ensure that no late payments are incorrectly mentioned. Check the amounts owed on each open account for accuracy. Sometimes you may have on your report a late payment error or an account that was sent to collections, even though you paid off the balance on time. Accounts that were opened in your name without your knowledge are also subject to dispute. If you spot any errors, report them immediately to the credit bureau. Each credit bureau has specific instructions on how to file paperwork to fix errors.

    #2. Reduce Your Debt

    How you use your credit affects your credit score. Referred to as credit utilization ratio, it is your total credit limit compared to the credit you are using. For example, if your credit limit is $10,000 and you have a balance of $5,000 across all your credit cards, then your calculated credit utilization ratio will be 50 percent. To improve your utilization ratio, stop using your credit cards and pay them down. I suggest to keep this ratio below 20 percent. Bringing it to 7 percent is my true favorite place to keep it, if possible. Most people are unable to pay off their debt all at once, so paying a little at a time also helps. Make note of all your accounts and check their respective statements to determine how much is owed on each account and the interest rate being charged. Create a payment plan that allocates your budget for debt payments, starting with the high interest cards first. You can maintain a minimum payment on your low interest accounts.

    #3. Create Payment Reminders

    Missing a credit card payment is a big hit to your credit score. Although some banks offer payment reminders, it is advisable to create payment reminders yourself. Setting up automatic payments to be debited from your account is another suggestion if you have difficulty remembering your payment due dates.

    #4. Obtain A New Credit Card

    This may seem counterintuitive, but it can help to raise your credit limit and lower your credit utilization ratio. Look for lenders that offer cash back incentives. With your new credit card in hand, think of it for building healthier credit not to get into more debt.

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      Alan Bermudez

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