If you’re wondering how to improve your credit bureau score, there are a few key strategies you can implement. These tips include paying off any charge-offs or collection accounts, limiting new applications for credit cards, and reducing your credit utilization ratio. The key to raising your credit score is to be consistent and make the changes that will help your score increase. Listed below are the top three strategies to improve your credit bureau score.
Paying off charge-offs or collection accounts
While you can’t completely erase charge-offs and collection accounts, you can try to resolve them. Contacting your creditors and explaining a temporary setback can go a long way. Missing a payment might be the result of a medical emergency, or you might have lost your job. In these cases, your lender may be willing to extend an exception. But you must make timely payments to avoid being tagged as a “late payer.”
You may be surprised to discover that your credit report has erroneous information on charge-offs or collection accounts. This is your right to dispute inaccurate information about yourself or your credit score. In most cases, you have 30 days to challenge inaccurate information within the credit bureaus. Make sure to provide all relevant documentation, including original invoices and account statements. Providing original documents may help your cause.
Limiting new credit card applications
There are a few ways to limit your new application for credit cards to improve your credit bureau score. The most obvious one is to avoid opening new credit card accounts. Opening new credit card accounts decrease the average age of your existing accounts, which is a factor in your credit scores. Additionally, new applications can damage your credit score, but the impact is minimal and usually only lasts for a short time. Every new application you make gives the lender access to your credit report and evaluates whether to approve or decline your application for additional credit.
Paying bills on time
While some utilities charge a fee for payments made using credit cards, this is usually not the case. These utilities are usually happy to accept your payment on time if you pay in full each month. But some will charge you interest if you keep a balance on your credit cards. Regardless, paying on time will help your credit score. Here are some tips to make your payments on time. You may even qualify for a credit card that carries a lower interest rate than others.
Utility bills do not show up on your credit report unless you fall behind on payments. However, when you miss utility payments, the service provider may close your account and send your debt to a collection agency. In some cases, a missed payment on these bills can even result in a charge-off account on your credit report. If you’re a renter, it’s especially important to pay your utility bills on time every month. This helps boost your credit score.
Reducing credit utilization ratio
While it may take months to recover from a derogatory mark or late payment, it is possible to reduce the credit utilization ratio to improve credit bureau scores quickly. This is especially important if you are applying for a loan or credit card soon and want to keep your score as high as possible. To learn more about how to reduce the credit utilization ratio, read the following articles written by Louis DeNicola, the personal finance writer.
Aim to reduce the percentage of your credit card debt that is used. Your credit utilization ratio is based on the percentage of your total outstanding balance, so keeping your balances below 50 percent will significantly improve your score. To determine your credit utilization ratio, you can use a credit monitoring app or a credit usage calculator. To find your credit utilization ratio manually, fill out this online form and input your monthly income and expenses.
