Our clients often ask us for tips on improving their credit, especially after bankruptcy filing. We have previously discussed improving credit after bankruptcy filing in our previous blog post. This is a simple basic list of what someone can do to improve their credit.
- Make sure that you pay all of your regular bills on time. The history of on-time payments accounts for the largest portion of a FICO credit score. Any delinquency, even unpaid parking tickets, can cause serious damage to a credit score if anything goes into the debt collection.
- Make sure that you keep your credit card balances low. Using a high percentage of the available credit on a credit card will reduce your credit score. We advise our clients to try and keep the balance on each credit card at 20% or less of the total available credit.
- Take out new credit cautiously and slowly. If you apply for several credit cards at one time, it will send a signal that you may pose more of a risk to lenders that are looking at your credit scores.
- Review your credit reports regularly. Please see our previous blog post on obtaining your credit reports. At www.annualcreditreport.com, you can get your free credit reports annually from each of the three major credit reporting agencies, Equifax, Experian and Trans Union. The best advice is to pull a single credit report every four months so, that way, you can stagger the reports and you will know every four months if there are problems. Once you get your credit reports, check for any errors such as listing of an account that you never opened or any reflection of a delinquency that is incorrect. If there is a problem, you need to file a written dispute with each credit reporting agency that has the error on its report. Please see this blog post for the exact way an incorrect entry on a credit report must be disputed.