A FICO score is a reflection of one’s debt payment patterns over time. Recent information is usually emphasized.
To improve a credit score, you must take the following steps:
- Pay bills on time
This is a major contributor to one’s score. Paying your bills on time will definitely improve your credit score over time. Even if you owe small amounts, making the minimum payment on time is critical.
- Minimize high outstanding debt
You should always try to keep your credit card balances low. These affect your score negatively and must be minimized for positive results.
- stop overextending yourself
Only open new accounts when absolutely necessary. Avoid the trap of applying for new accounts just to get a better match; this practice often does nothing to improve credit.
Don’t move the debt, pay it instead. This helps repair credit scores. Unused cards should not be closed as short-term strategies. Debt remains on one’s report and therefore may not do much to help repair credit.
- protect yourself
Always take care to protect yourself and any information that is confidential from identity theft and fraud.
When you apply for a loan, the applications appear as an inquiry when a lender looks at your credit history. The amount of debt one already has can be used to show that the person is managing their financial affairs responsibly, and thus increases the chances of getting more from lenders.
no quick fixes
It will take some time to get scores to cheer you up. Late payments, many inquiries, points of public record like bankruptcy, are negative information on your report and time is a good ally. Bad scores don’t go away overnight, but can be fixed over time.
Closing revolving accounts can be positive, since there are fewer open accounts and the amount that can be collected is reduced. Risk factors are important when looking at the effect of certain changes on your credit report and later on your score. These risk factors identify elements in one’s story that have the greatest effect, so that one can take appropriate action.
How long should you wait before seeing results?
The actions listed above help you build a good track record, which is reflected in your FICO score. The length of time it takes to build a positive financial history after negative changes depends on what prompted the change. Some reasons for negative score changes include accounts in collection or delinquency. These negative entries on your report have an expiration period, so time may be on your side; in general, they are the following:
- Delinquencies stay on your credit report for seven years.
- Many public record entries stay on the report for seven years, although bankruptcies can stay for 10 years; Unpaid tax bonds remain for 15 years.
- An investigation will remain in one’s report for two years.
Improve your credit score with the tips above and be on your way to healthy reports in the future.