How to Make Your Credit Rating Higher

If you forget to make a payment to your credit card company or a defaulted debt you owe ends up with a collection agency, that negative information will subsequently appear on your credit report. Your credit report follows you wherever you go in the U.S., and potential lenders and creditors will all want to review your credit report before conducting business with you. Fortunately, even if you have made considerable financial mistakes in the past, you can improve your credit rating and stop fearing requests to pull a copy of your credit report.

Instructions

1

Pull a copy of your credit report from Equifax, Experian and TransUnion. You can pull one copy of each report for free every 12 months at AnnualCreditReport.com -- the only website with formal approval from the Federal Trade Commission to provide consumers with their free annual credit reports.

2

Review your credit report for mistakes. Missed payment notations when you made payments on time or collection accounts that do not belong to you can drag down your credit score. In addition, misspellings of your name or an error in your Social Security number could result in someone else's debts appearing within your credit history.

3

Dispute any errors you discover with the credit reporting agency maintaining the errors. You can dispute credit reporting errors over the phone, by mail or online.

4

Offer to pay off old collection accounts in exchange for the company deleting its negative report from your credit history. Collection accounts over $100 cause considerable harm to your credit rating.

5

Send a "goodwill letter" to any current creditors who are reporting late payments to the reporting agencies. A goodwill letter is merely a formal request that the company withdraw its negative reports due to your status as a longstanding customer or the fact that you almost always make timely payments.

6

Pay down your credit card debt or request a higher spending limit from the credit card company. The credit scoring formula compares the amount you owe to your credit limit. If the resulting ratio is above 30 percent, your credit score will suffer as a result. Paying down the debt or requesting a higher credit limit helps keep this ratio low.

7

Set up automatic bank drafts for accounts you pay each month. This reduces the chance that you will forget to make a payment and incur a missed payment notation on your credit report. Regular on-time payments build your credit rating over time.

8

Ask that a loved one with a positive credit rating add you to his credit card account as an authorized user. Once this occurs, the credit card company will report his credit card history on your credit report -- boosting your credit rating.