Credit scores are dynamic reporting figures, meaning they do not always remain stagnant for long. Just as unwise money management can cause your credit score to drop, wise personal finance habits can cause your score to rise back up. Gaining points back on your credit score can be more challenging and much more gratifying than losing them, however, and the process requires patience, discipline and often sacrifice. Understanding what it takes to raise your credit score is the first step toward taking control of your finances.
Limit Accounts
Having too many open credit and loan accounts can reduce your credit score over time. Even simply applying for too many accounts can have a negative impact on your score. If you hold more than two credit cards, or have an outstanding balance on more than two personal loans, consider paying some of your accounts off to keep your number of credit accounts under control. Unlike the late 20th century, the focus on credit borrowing in the 21st century shifted toward emergency spending rather than continual discretionary spending. Let your credit profile reflect this trend.
Timely Payments
Creditors and lenders often make regular reports to credit bureaus, even if your account is in perfectly good standing. Making all of your monthly payments on time, or early, can have gradual, positive effects on your credit score, earning back some of the points you may have lost. Make debt payments a priority at all times to ensure that tight finances don't cause you to fall into default.
Account Closure
Do not ignore debts that have been written off, and do not try to get out of a debt through the court system. While the legal system may be able to reduce or eliminate your defaulted obligations, nothing can prevent the negative impact it will have on your credit score. Pay off any outstanding creditors with which you may be in default, and close the accounts permanently.
Personal Responsibility
Lenders and creditors are likely to report all the positive actions you take to improve your credit score to the major credit bureaus, but do not count on them doing so. Call each of your creditors and make sure they've reported your timely payments, account closures and other positive actions to the credit bureaus. If they have not yet done so, call back in a week or so to ensure that they have honored your request.
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