Improve your credit score

Have you ever been late paying a bill? Your credit score might have been affected by just one skipped payment.

Whether you’re trying to repair your damaged credit or you just want to improve your credit standing, here are a few easy tips to get you to your ideal score.

1. Know your score

In order to improve your credit score, you should start with finding out where you stand. (Get your free credit report.) Credit scores range from 300 to 850–lenders believe that the higher your score, the lower your risk as a borrower.

You have three FICO® scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you. Lenders use these scores to determine the amount and terms of your loans. A high score could save you thousands of dollars in interest.

Also remember that credit scoring is not just limited to banks. Other organizations, such as mobile phone and insurance companies and government departments use similar techniques. If you’re applying for a job, an employer may also run a credit check on you.

2. Pay your bills on time

Late and delinquent payments and collections can have a major negative impact on your credit score.

If you have any past-due bills, pay them now and then stay current with future payment cycles. If you cannot afford to make payments, call the lender and see if you can work out a payment plan. Most lenders are willing to work with borrowers to get current on their payments. If your home is in jeopardy, some lenders even offer loan modifications, so that you can stay in your home.

If you have trouble remembering to make payments on time, check with your bank to see if it offers e-mail or SMS alerts to remind you when a payment is due. Tech CU has this service in eNotifications.

Oh, and if you need more help, the Federal Trade Commission has tips for those who are knee-deep in debt.

3. Pay down your debt

High outstanding debt can also negatively impact your credit, so try to pay more than the minimum amount due each month. In fact, if you can significantly pay down–or even pay off–all your installment loans such as mortgage, auto, student, and credit lines, this can drastically improve your scores.

It may sound difficult at first, but there are several things you can do today to get those loan balances down. And, while we’re at it, be careful to avoid “dumb ways” to pay off debt that could actually get you into more financial trouble.

4. Review your credit report

You should review your credit report annually to check for inaccuracies and/or fraud activity.  Correct these issues as soon as possible. If too much time passes before you try to resolve an issue, it may be too late, and that inaccurate mark could stay on your credit report for as long as seven years.

• Make sure that your name, address, Social Security number, and all other personal information is correct.
• Make sure that there are no accounts, debts, bankruptcies, or court judgments on your report that don’t belong to you.
• Make sure that payment histories and balances are correct and that any errors you have reported have been fixed.

If you believe that you may be a victim of identity fraud, contact the U.S. Department of Justice immediately.

We also found a helpful Bloomberg video tutorial on improving your credit score:

Additional resources:
5 tips for improving your credit score
10 things you can do today to improve your credit
15 ways to establish and improve your FICO score