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Taking Steps to Repair Your Credit

On Behalf of | Jan 1, 2013 | Consumer Protection

Last week’s blogs discussed the importance of your credit score and explained how it is calculated.  See blog.  This week’s blog will give you some tips to improve your score, but there is no quick fix, as restoring your credit takes time and patience.

When taking steps to improve your score, first, you need to check your report.  If you have not done so already, order a free copy of your report from  As explained in several previous posts, the Fair Credit Reporting Act (“FCRA”) entitles you to one free copy of your report a year, so use it!  Your report contains all of the information used to calculate your score, so you need to know what is on it before determining what needs to be done to improve it.  Check to make sure your report contains only accurate information, positive or negative, and if you find errors on your report you can dispute the errors with the credit reporting agencies (“CRAs”).

The next step to improving your score is making an effort to reduce your debt, obviously a task easier said than done. Make a list of all of your outstanding debt, compare balances and interest rates and determine which accounts can be paid off and/or closed, effectively raising your credit score.  Too many open accounts will reduce your credit score and cause financial strain, while on the contrary, paying off debt and closing excess accounts will raise your score and relieve stress.  Try to determine a payment plan on accounts making it easier to pay off excessive balances and organize your finances.  Always try to make more than the minimum monthly payment on accounts, which will quickly reduce your balances and raise your score faster as a result.

A simple way to improve your credit score is to make timely payments on your accounts.  Payment history accounts for as much as 35% of your score and late payments will weigh down your number.  Delinquent payments, even if only a few days late, and collection accounts negatively impact your score. If you missed payments, get current and stay current.  The longer you continue to make timely payments, the more your score will continue to increase. The older a negative account is, the less it impacts your score.  It is important to note that paying off accounts or making timely payments will not remove the delinquent history from your report but will improve your score moving forward.

One way to ensure timely payments, is to set up monthly payment reminders.  This can either be a simple alert or an automatic withdrawal.  There are several online programs that allow you to set up automatic withdrawals for your accounts or email reminders to make your payments.  Another way to improve your credit score is to reduce the amounts owed on your balances. This category makes up 30% of your credit score.  Keeping your credit card balances low is an easy way to drive up your score but requires a conservative approach to your finances.

For more information on your credit score or assistance with credit report problems contact SmithMarco P.C. for a free case review.