The higher your credit score, the more likely your chances of being approved for loans, credit cards and discounts from your bank. Many people strive to keep their credit score within a particular high range, but variables often influence the ability to accomplish this. If your credit score drops below a point of comfort, bringing it back up is not impossible. Fixing your credit score takes time and effort, but is doable.
Get Organized
Keep your finances organized so that bills do not get lost -- either physically lost within the regular mail or digitally lost in your email in-box, if you use electronic banking. Misplacing your bill due to disorganization leads to late payments, which hurt your credit score. It is important to identify one place in your home for keeping financial statements, account balances and transaction receipts organized so that you can access information when you need it.
Know the Debt
It is smart financial management to know what you owe if you want to pay off debt and improve your credit score. If you are single, then make a list of all of your debt and come up with a grand total. For people who are married, work on this project as a couple so that you know your combined outstanding balance.
Make Timely Payments
A late payment on your mortgage, car loan or credit card brings your credit score down. It also causes you to endure penalty fees for late payments, which end up costing you more money -- on top of what you already pay in interest. If you keep an automated calendar of when to mail your payments, or sign up for automatic bill payments with your bank, then you'll pay your bills in a timely fashion, and subsequently bring up your credit score.
Overpay Bills
Many people over pay their minimum fees on loans and debt so that they may eliminate the balance faster. When your debt is paid off, your credit score improves, so overpaying your monthly bills is smart financial planning.
Stop Charging
If you can afford to pay for things out of pocket, then avoid charging purchases. Many people use credit cards out of convenience because taking out cash requires a trip to the bank. But every time you use your credit card, your balance increases, and it affects your credit score. The less you use your credit card, the more your score will improve.
Read Financial Statements
Financial institutions are not flawless, and they sometimes make mistakes. When you get a financial statement, read it over carefully to make sure the information is accurate. If you find a discrepancy between something that is on the statement versus what your receipts say, then dispute the difference. You want as much accuracy as possible when attempting to fix a credit score.
Check Credit History
Each year, get a copy of your credit report from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. Make sure no one opened any new accounts under your name. Make sure the accounts you paid off no longer show as active. Credit bureaus can make mistakes, and their mistakes work against your credit score.
Consolidate
Depending on the type of debt you have and who you bank with, you might qualify to consolidate your debt. Consolidating your debt rolls multiple debts into one, so that you pay off one sum as opposed to several smaller ones. This option is for consumers who needs help staying organized, and it may even provide consumers with a lower interest option so that they can apply more money toward the principal balance.
Build Credit
You might be one of those people who may have to build their credit in order to fix their credit score. This action is generally if you have zero to little debt. In such a circumstance, get a credit card and use it every now and then for things like gas and groceries. Pay off the total balance every billing cycle, then use the card again for similar items the next month. As long as you pay it off every billing cycle, the debt will strengthen your credit.
Negotiate
Since creditors want to get their money, they might strike a deal so that they get paid. If you are up for the challenge, then negotiate with your lender about erasing a late payment from your credit history, in exchange for paying off your current balance. It never hurts to try.
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