Negative marks on your credit report can spell big disaster the next time you buy a home, rent an apartment, take out a credit card, etc. Having good bookkeeping skills is important, but it can be easy to let your score slip by missing a payment or being a victim of identity theft. It can also take years to build it back up. But never fear, below are 8 easy hacks to get your score up 10 to 20 points in as little as one month.
1. Remove Late Credit Card Payments
It happens to all of us, we mean to pay off our credit card bill but it slipped our mind. This one little mistake can have quite a negative effect on your credit score. However, with a simple call to your credit card company, you can just ask to have it removed. This often works every time under the following conditions:
- It is your only late payment on that credit card on the last year
- Your balance is paid off
- You are in good standing with the credit card company
2. Eliminate Credit Card Balances From Small to Big
When someone runs your credit report, they will be able to see how many credit cards you have and what the balance is. It may not seem like it, but any outstanding balance can hurt you. This is why it is important to pay off any carry over balances as soon as possible. And if you don’t have the funds, start of with the smallest balance first and work your way up.
3. There is Such a Thing as Good Debt
Just because you have paid off a house, car, or other loan doesn’t mean that you should have it removed from your credit report immediately. These items can automatically stay on your credit report for up to seven years. Why is this good? It shows that you were able to take out a loan and pay it off on the agreed amount of time.
4. Errors That Aren’t Your Fault Are Your Problem
Ever made a mistake on credit cards? So have the credit card companies. But without you to tell them what the mistake is, they may be damaging your credit score behind your back with the big three agencies: Experian, Equifax, and TransUnion. Errors can include charges you didn’t make, payments you did make, even typos on your name or social security number. This is why it is important to check your credit activity regularly and call in as soon as you find the error.
5. Make a Deal
Did you know that you can negotiate for things like lower interest rates and a bigger line of credit? Both of these things can be accomplished in a few minutes if your credit card company is game and will positively affect your credit score. Just remember that if and when you get a bigger line of credit to not abuse it.
6. Don’t Close
If you have paid off a credit card balance or have one with a long time balance of $0, be sure to leave the account open so the available credit limit can increase your credit score. This will occur a few points every month as time stretches on. A VantageScore study reported that those who closed the old accounts could see their credit drop between 10 and 30 points, depending on the situation.
7. Paying off Past Debt Isn’t Always Good
Do you have a bill that was sent to a collection agency for being delinquent? Whether or not to pay right away can actually have two different effects on your score. Paying it off in full or negotiating for a decreased settlement can allow you to remove the item from your credit report. According to Credit Sesame, older versions of credit score keepers focused more on the fact a consumer had a delinquent account, versus the amount owed. Those who immediately paid off this debt wouldn’t necessarily improve the status of the negative mark caused by the delinquency. It can take anywhere from 30 days to months for the credit score to update.
8. No Cash Advances
Among the many juicy details on your credit report, the cash advance may be on there. Those who even take out a one time cash advance can signal to potential creditors that they are in desperate need of cash and are unable to access an ATM. Withdrawing cash from an ATM through your bank account does not affect your credit score.
Houston Bookkeeping Credit Score
If you live in Houston and need help building your credit score with the help of an experienced bookkeepier, send us an email or give us a call at 281-894-6494.