Ideas on How to Fix My Credit Score

In the United States, a consumer's credit score can affect his ability to qualify for a mortgage, car financing and even credit cards. Your credit score can even affect how much you pay for other things like an auto or home insurance policy. A good credit score is generally above 720. If your credit score doesn't measure up, you can start doing things now that will fix your credit for the long haul.

Settle Up

Fix your credit score by paying off any old delinquencies, charge-offs and collection accounts that might be pulling your credit score down. It takes seven years for a bad debt to cycle off your credit report and cease its negative impact on your credit score. You can speed up the process and repair your credit score sooner by paying off all those old debts. Contact the lender, and ask them to send you a statement showing the total you need to pay for them to report a positive payment on your credit. Make the payment as agreed, request a receipt of payment, and send proof of the settled account via certified mail to each of the credit bureaus -- Transunion, Experian and Equifax.

Start Paying on Time

If you have had a history of late payments, your credit score may have been damaged by each late payment. To fix your credit score, start paying every bill on time each month. Each month that passes with timely payments reported by your lenders will increase your credit score. Keep records of your payments and when they were sent out or received, so you can dispute late payment reports if necessary. Sign up for automatic payments if possible, and schedule all of your monthly payments to arrive three to four days before their due date.

Evaluate Your Debt

If most of your credit accounts are maxed out or close to being maxed out, consider setting up a more aggressive payment plan to reduce your total debt. Your credit score may have been negatively impacted by having too much debt. Aim for approximately three credit or store charge cards along with one or two installment loans like a mortgage, car loan or personal loan. Reduce your monthly charging habits, and pay down the balances on your accounts so your total monthly revolving debt is around 30 percent of the total credit available to you. A lower debt ratio can increase your credit score because it shows lenders you use credit wisely.

Be Patient

Fixing a credit score can take time, and it's important to be patient while you wait for your positive actions to begin translating to higher scores. Use your credit sparingly, pay on time every month, and give your creditors time to report a positive payment history on your credit bureau report. As your improved credit habits are recorded, your credit score will follow suit.