Top 5 Ways To Raise Your Credit Score
Mistakes happen and you can challenge any item on your report you feel might be inaccurate. "8 out of 10 reports contain errors".
You can negotiate the debt. When failing to collect a debt, creditors may report a negative listing on your credit as a way of holding leverage over you. But the creditors have laws that they have to follow, such as the Fair Debt Collection Practices Act (FDCPA) and there are laws that protect you against any unfair or abusive practices. For legal advise we suggest consulting with an attorney. Just to set the record straight, the creditor put the item on your report they can also remove the item! Don't let anyone tell you different. So in return of paying off the debt, you want to try and convince the creditor to remove the negative listing on your report, not just update it saying "paid" or "satisfied", as that would not help you as much as getting it removed entirely.
Opening a line of credit and making payments on time is something you're going to want to do. Creditors are going to want to see a good history of payments because they want to know if they extend you any credit that you're going to pay them back and on time. Now this is where you can really use the "system" to your advantage! It's not all about making payments on time, rather how much of that credit limit you use (lower the better). For example if you have a credit card with $1000 limit and your balance show $500, your at 50% credit utilization, you want to keep that utilization number as low as you possibly can!! Preferably under 30%. Another trick is when a creditor raises your credit limit, as long as you don't fall into the trap of using that increase, you will lower the utilization ratio literally over night and do not close any cards as that will have the opposite effect on your utilization ratio.
Your payment history is the single biggest factor in your credit score weighing in at 35% of the score. So making good on-time payments month after month is going to have a big impact on your score, but making a single late payment can undo all those on-time payment and can last on a report for up to 7 years! Make sure you make your payments on-time every month, even if it is just the minimum.
Using too much of your credit limit at any given moment doesn’t look good. Suppose your limit is $3,000 and a month’s worth of havoc (car repair, doctor bills, plane ticket for kid to get to college) means you’ve charged up $2,900. Sure, you plan to pay in full by the 18th of the month – but until then it looks like you’re maxing out yet another card.
Instead, make one payment just before the statement closing date and second one right before the due date. The first will likely reduce the balance that the credit bureaus see and the second makes sure you won’t pay interest or a late fee, plus you don't know when the creditor reports to the bureau's, so this will make sure your balance doesn't get reported with a high utilization ratio.