Credit Reports

The best way to improve your credit score will depend on your individual situation. But here are some great tips:

  1. Whatever you do, the most important thing is to make sure you don’t get any collections. Setup automatic payments for utilities if you can, and make sure your checking balance will continually cover your recurring bills. Anytime you go to the doctor or get a ticket, pay it right away. Overdue library books? Return them. All of these are common collections that we see on credit reports.
  2. Make your payments on time. A late payment can drop your score by a couple dozen points. For your loans and credit card payments, setup automatic payments if you can and keep track of your checking balance.
  3. Keep your credit card balances to a minimum. If possible, keep it under 15%, then 30%, then 50%. These are breaking points for scoring, and the lower the balance the better you are off. Pay them off monthly to avoid interest.
  4. Open up more debt if you need to. If you don’t have three active accounts (tradelines), then you probably don’t have enough debt. In order to improve your credit score you need to show that you reliably pay off your debt. Don’t have any debt? Get some. And then pay it.

If you need to do credit repair & improvement, here is my advice:

  1. Please reach out to InCharge, who is a non-profit debt and credit counselor.  We have a partnership with them and they provide free debt and credit counseling to our clients for one year.  I recommend you reach out to them for advice and guidance.
  2. If you have any collections, you could try to negotiate a “pay for delete” on any collections you have.  Paying a collection and having that stay on your report as a paid collection does not improve your score.  The only way to improve your score related to a collection is if the collection agency writes and sends a letter to the three credit bureaus instructing them to delete the collection from the record.  I will warn you that getting a collection agency to do this is not easy, and they are not always trustworthy companies.
  3. If you have any late payments on credit cards, you could call and ask your credit card company for a “courtesy delete.”  This would be you asking them to do you a favor.  This is something they do not typically agree to, but it’s worth asking.
  4. The balance on your credit cards is reported to the credit bureaus monthly when the statement is issued.  To have the highest and best possible credit score, it’s important to keep that balance below 30% of the limit of your account when the statement is issued.  It’s also good to pay off the balance monthly and not retain a balance.  If you’re not yet at this point, it’s good to get there.
  5. I’ve heard if you register for https://www.optoutprescreen.com that this can result in an improvement of a few points.
  6. If you have a relative with whom you share mutual trust, they could add you to an existing credit card as a joint (not authorized) user.  When the next statement is issued, they would be reported as having this line of credit.  If that line of credit has a long history, the newly added user would inherit the entirety of the history of the account.  This could be helpful if a relative has an historic card which is paid off monthly and the balance never rises above 30% of the limit.  The relative though would need to trust the newly added user not to use the card.  And the newly added user would need to trust the relative to continue making on time payments.

I hope this helps!