If you are experiencing high debt loads, you are probably aware of the effects it has had on your credit. Because credit scores are calculated from many factors, one slip up in an area can cause your score to drop. However, there are a few easy ways you can boost your score with fairly little effort.
Your Credit Report
One area of improving credit people tend to overlook is checking their credit report for inaccuracies. If there is any information that is inflated or inaccurate on your credit report, your credit score could be suffering for no reason. Get a copy of your report and make sure everything is up to date and accurate. Dispute any discrepancies with your creditor directly, as well as the credit reporting agency. Obtain a letter from your creditor demonstrating your account was paid in full, closed or never carried any delinquent remarks and give it to your credit reporting bureau. Stay in contact until all the issues have been resolved.
Your Debt Balances
We all know that too much debt means a lower credit score, but many people begin to feel overwhelmed by the debt reduction process. Take a look at your accounts and identify which ones have the highest balances and debt-to-limit ratios. Pick one account that you can devote all your extra cash to and begin to attack the balance on your card. Try to reduce your debt balances to less than 30 percent of your total credit limit on that account. There is no need to pay off your account completely, but reducing your debt-to-limit ratios to below 30 percent will give you an instant credit score boost.
If you feel your debts are out of your reach, contact your creditor. Credit negotiations is a good way to lower your payments and get on track to resolving your debts. However, make sure to get a copy of the agreement from your creditor in writing to keep for future use. Once you have reduced your debt balances you can provide the credit reporting bureau proof that you entered a voluntary credit negotiation agreement, which is far better than having your debts “settled”.