Strategies to Improve Your Credit Score

If you would like to learn how to improve your credit score, then you will want to read this article. Specifically, we will be discussing three strategies that you can implement to improve your score. After reading this article, you should have a good idea of some things that you can implement with your own credit file.

Play the Dispute Game

Under the Fair Credit Reporting Act, both the credit bureaus and information providers (creditors) must investigate any dispute you make with regards to your credit file.

How does this work? When you file a dispute, the credit bureaus will immediately notify the information providers of the dispute. Your creditors have just 30 days to respond to the credit bureaus. The credit bureaus must delete information from your credit file that creditors fail to verify within 30 days. This must happen even if the information is actually correct.

Pay Down Revolving Debt

The most successful credit repair efforts involve paying off revolving debt. If you have a high level of debt, there is most likely no other single strategy that you can implement that will have more impact than paying off debt. What you want to do first is pay down each account to 25% of your total credit limit. Once each account is down below this limit, you can then go on and pay the accounts off if you would like. Keeping accounts at or below the 25% mark is critical to optimize your overall score.

One thing to keep in mind is that you never want to close accounts once they are paid off. Closing accounts lowers the total credit that you have available to you and therefore increases your credit utilization ratio. Instead, just cut up the cards when you pay accounts off. This removes the temptation of using the card but still allows your credit to benefits from it.

Piggyback

Many people believe that FICO 08 put an end to piggybacking. The truth is that it merely regulated how piggybacking is done. The reason for the changes is that unscrupulous credit repair companies were having people pay strangers to be added to their credit cards.

Under the new guidelines you can still piggyback, but only a parent or spouse can add you to their account and have it impact your overall credit score.

If you have a parent or spouse with an older account that has a great credit history and low balance, this is still a great way to improve your credit score!


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Vincent Polisi is the founder of Credit Repair College. To learn more about how to improve your credit scores, please visit him on the web.