7 Tips to Improve Your Credit ScoreJune 18, 2019
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Nowadays a credit score is such an important aspect of one’s overall financial picture. In fact, it is common to think that one late payment is harmless, but it can actually have long-term consequences, potentially remaining on your report for seven years. Today I’ll be sharing 7 practical tips to help you improve your credit score, including how Lexington Law Firm can provide the resources you need to clean up your credit report and raise your credit score.
When it comes to credit scores, the gold standard is the FICO® Score. In fact, 90 percent of financial institutions make their lending decisions based on one’s FICO score. Pioneered by Fair Isaac Corporation (a 50-year old company), the FICO score is computed using a special algorithm that factors in one’s credit files across the three main credit bureaus: Equifax, Experian, and TransUnion.
A few years ago, we had managed to save up quite a bit of money and wanted to pay off a good portion of our mortgage. We wanted to lower our monthly payments so we decided to refinance the remaining balance of the mortgage. Knowing that the banks would pull our credit reports, we were careful to follow some best practice guidelines in the months leading up to the refinance. For example, we did not close any credit cards, we did not open any new credit cards and we paid all our bills on time. By the time we were approved for the new mortgage, our credit scores had climbed into the Excellent range and we were offered the lowest interest rate available.
Today I’ll be sharing some smart tips you can follow to boost your credit scores.
1. Clear up any collection accounts.
Do you have any debt collection accounts open? Is there a medical bill you’ve neglected to pay in full? Or maybe that auto loan has become delinquent? Regardless of the nature of the debt, get in touch with the collection agency and work out a payment plan as soon as possible. Getting those collection accounts closed & settled quickly will have a positive effect on your credit score.
2. Let Lexington Law Firm help repair your credit.
A surprising statistic I recently learned is that the credit repair industry has grown ten times in recent years… and for good reason! So many individuals are in need of credit repair nowadays. Furthermore, there is so much misinformation out there and consumers need to be informed that credit report errors can – and should – be fixed. In fact, Lexington Law Firm strongly believes that consumers have a right to a fair and accurate credit report.
The credit repair process can seem overwhelming to the uninitiated and that’s where the professionals at Lexington Law Firm can help. They can strategically navigate the credit repair process and fight for their clients’ rights to good credit.
When it comes to an accurate credit report, there are so many laws out there that empower consumers. These include The Fair Credit Reporting Act (FCRA), Fair Credit Billing Act (FCBA), Fair Debt Collections Practices Act (FDCPA), The Servicemembers Civil Relief Act (SCRA), The Truth in Lending Act (TILA), and the Health Insurance Portability and Accountability Act (HIPAA). These laws endow upon consumers the right to dispute erroneous items on their credit reports. The dispute can take place with either the credit bureaus or individual creditors.
This area of the law can be incredibly complex, but Lexington Law Firm can help everyday consumers fix credit errors on their reports. Did you know that Lexington Law Firm is the oldest name in credit repair? In fact, it’s the only firm with both the legal experience and the technology to achieve positive results for consumers.
The lawyers at Lexington Law Firm have indeed democratized the credit repair market. There are packages that meet every client’s needs and budget, with plans starting at just $24.95 per month.
I really love that Lexington Law Firm has even developed a special app that gives consumers access to helpful tools & resources. It is a real-time modern solution that empowers consumers.
3. Build up a credit history.
As they say, past payment performance is a good indicator of future performance. Building up a credit history is essential for improving your credit score. To do so, simply pay off your credit card bills in full every month. In addition to credit card bills, make sure you pay all loans on time, including student loans, auto loans and mortgage bills. Keep in mind that paying late or settling an account for less than what you originally agreed to pay may negatively affect your credit score.
4. Optimize your credit utilization ratio.
One’s credit utilization ratio is another important number in determining your credit score. It’s calculated by adding all your credit card balances at any given time and dividing that amount by your total credit limit. A general rule of thumb is that lenders like to see low ratios of 30% or less, and people with the best credit scores often have very low credit utilization ratios.
5. Be patient.
Raising one’s credit score won’t happen overnight. The best strategy is to develop long-term credit habits. It can potentially take years to make a significant change in your credit score but if you follow the right steps, you will see improvements over time. Patience is a virtue worth following in this respect.
6. Open new credit accounts only as needed.
Opening too many credit card accounts can negatively affect your score. Every time you apply for a new credit card, you are initiating a hard inquiry on your credit report. These inquiries could negatively affect your score. Furthermore, having extra credit cards can potentially tempt you to overspend and accumulate debt. Another important thing to keep in mind is not to close any unused credit cards. Keep them open, since closing an account will increase your credit utilization ratio.
7. Dispute any inaccuracies on your credit report.
Did you know that every year millions of Americans are denied loans for homes and cars due to errors on their credit reports? On average, these errors can take a whopping four months to fix! If you notice any inaccuracies on your credit report, it’s essential to dispute them with the credit reporting bureaus (TransUnion, Equifax, and Experian.) Lexington Law Firm has long-standing relationships with all three of the credit bureaus. These relationships, along with a significant expertise in removing credit report errors, allows Lexington Law Firm to successfully advocate for their clients.
Don’t forget to learn more about how Lexington Law Firm can help you navigate the complicated world of credit repair. What are your credit repair goals? Have you ever used the services of Lexington Law Firm?