Now is the time to take charge, go on the offensive and learn ways to improve your scores. Score improvement can take time, and the process can be daunting. Below are three tips to help you get started.
Obtain and review your credit report and credit scores. Consumers need to obtain and understand their current credit profile prior to determining whether they need to find ways to improve their scores. Credit reports are available for free once a year from each of the consumer reporting agencies: Equifax, Experian, and TransUnion. Credit scores are generally available at a cost but may be available with free or low-cost trial periods. Some services may also provide your credit report when you order your scores.
Construct a household budget. This is important to help improve your credit as well as your overall financial health. By developing and sticking to a budget, you will help ensure that you have sufficient funds each month to pay for your credit debts and other expenses. If you wonder where your paycheck is going every month, detailed tracking of all your expenses will let you know and you may be able to make the appropriate adjustments to balance your budget and pay your debts on time.
Develop a core set of accounts to build your credit history. This should be your strategy going forward so you are handling your accounts in an optimum way. Creditors and credit scoring models like to see stable, satisfactory and longstanding accounts. Choose a minimum of three, but ideally four to six accounts that will be your core credit accounts that should remain open for several years. Several years of good payment history on a diverse set of account types (revolving, installment, open, mortgage) may lead to an increase in scores.
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