How Do I Improve My Credit Now That Bills Are All Paid?

Paying all your bills is just the first step to re-establishing a healthy credit score. It is a terrific first step, and you should be proud of yourself, but also realize you need to establish a lengthy credit history that proves you are trustworthy. Accomplishing this requires avoiding additional debt, maintaining healthy relationships with creditors and acting responsibly. It will take several years before your credit is healthy enough that you can seek a loan or mortgage, but for now, be patient.

Instructions

1

Avoid incurring any additional debt. If you must borrow money, whether through a credit card or a loan, ensure that the balance never exceeds 50 percent of your available credit. More importantly, always pay beyond the minimum balance and never submit a late payment. Just one late payment will dent your credit again and delay the improvement process by additional years.

2

Keep your credit card accounts open. By maintaining relationships with your creditors, you will over time prove to other creditors that you are trustworthy. This will significantly impact your ability in the future to acquire a loan or mortgage. The key lies in not taking advantage of the credit. Tear up your cards if it is necessary to prevent yourself from using the available credit, but do not close the accounts.

3

Act with caution when seeking additional credit or a loan. If you require additional money for an emergency procedure or a house purchase, avoid submitting too many applications. Also, try seeking money from a bank before you seek it from a finance company or a credit card company, because a bank holds more clout. Never open new accounts just to improve your rating, because you risk actually hurting your rating.

4

Review your credit report for any inaccuracies. If you find incorrect or incomplete information in your report, write a letter to the credit reporting agency that supplied the report and argue your case. Cite every error, provide copies of documents that back up your claims and recommend feasible solutions. Be patient, as it will take at least 30 days for the agency to review your letter.