Our credit counseling and debt management plan services aren’t intended to improve one’s credit score, but the free financial literacy education we offer can teach you to the right ways to improve your own credit score.
The Federal Reserve offers 5 Tips: Improving your credit score, which include
- Requesting your credit report and ensuring its accuracy
- Paying all of one’s bills on time
- Learning how credit scores are calculated
- Learning how to legally improve one’s own credit
- Avoid being scammed by credit repair companies
It’s all great advice, and offers the basics of improving your own credit in a way that is fully legal.
We have 5 additional tips of our own:
- Hold off on applying for new credit cards. Don’t apply for new bank loans either, for that matter. The longer you can go between applications for credit, the better your score will get. Hard inquiries drop off of your credit report after 2 years, so that’s your target minimum for going without applying for new credit.
- Stick with one credit card. Only use one credit card if possible, preferably the oldest card you have, to preserve the length of your credit history.
- Pay off past-due balances. Don’t pay off anything that is out of statute (usually that means any account that has been past due for more than seven years), but anything that is more recent and shows overdue balances should be paid up to improve your score.
- Pay down balances. The less you owe toward credit card debt, the better for your score. If paying off completely isn’t an option, try to get your balance down to less than half of the total available on any given credit card. If you’re really having trouble getting balances paid down, call us for free credit counseling. Don’t worry, credit counseling has no impact on your credit score.
- Pay every bill on time. This is the first point the Federal Reserve makes at the above link, but it bears repeating. The single best thing anyone can do to legally and legitimately improve his/her credit score over time is to pay bills on time every month.
Rebuilding a good credit score takes time, and you should avoid anyone peddling advice for quick fixes. To learn more about how credit scores are calculated, see our series on Credit Score Scale Factors. Another good place to start is our article on How to Get Your Free Annual Credit Report.
Remember, our credit counseling services are free of charge and available on demand!