7 Tips to Improve Your Credit Report & Score

Everybody wants a better credit report. A better credit score will save you thousands of dollars in interest and finance charges associated with a new line of credit. Use the following tips to improve your credit report and skyrocket your credit score.

#1 - Pay Your Bills on Time, Every Time

Ok, I know this one kind of goes without saying. Everyone knows they’re supposed to pay their bills. It’s really important to get into a rhythm of paying your credit card bills every month and paying them down as much as possible. Setting a reminder on your computer or phone can help you avoid costly late payments. Late payments will cost you additional fees as well as hurt your credit score.

#2 - Stay on Top of Your Credit Report

Checking your credit report alone is not enough to improve your credit score. You need to make sure that all of the information on your report is accurate. If there are any accounts on your credit report which have inaccurate information, you can dispute the item with the major credit bureaus. You will need to create a dispute with every bureau that is reporting the inaccuracy. This means you may have to create 3 different disputes for every mistake on your credit report.

#3 - Decrease Your Debt Ratio

You should try to keep all of your credit accounts at or below 30% of the overall balance at any given time. Having a higher debt ratio than this can significantly impact your overall credit score. Keeping old accounts open that you no longer use is an easy way to drive down your debt ratio by leaving credit available that you aren’t using. Old accounts also provide a solid credit history for your credit report which can increase your score.

#4 - Avoid Opening New Accounts

Simply applying for new credit can create inquires on your account which can lower your credit score. If you’re serious about improving your credit report you should avoid opening any new accounts, especially revolving credit card accounts, unless absolutely necessary.

#5 - Don’t Transfer Balances

It may seem tempting to transfer a large balance from a high interest rate credit card to a lower interest rate credit card, however, this can hurt your credit report and score. The best thing you can do with a high interest credit card is to pay down the balance as much as possible then avoid using it in the future.

#6 - Request Limit Increase

This might not seem like a good idea, however, if you are able to get a credit limit increase on any of your credit lines you will be lowering your debt to available credit ratio which can raise your credit score. It may be difficult to negotiate a limit increase after missed payments, which makes it extremely important to always pay on time.

#7 - Keep Good Records

It’s important to keep all bank statements, bills, checks, receipts and any other financial records for at least a few years. This alone won’t help improve your credit report; however, you can use your financial documents to dispute any inaccuracies you may find on your credit report. Remember, it’s your word against your creditors and most of the time the credit bureaus are going to side with the creditors unless you can sufficiently prove your case.