By: Stephanie Mccombs
Are you tired of having high-interest rates on your credit cards and car loans because of your low credit score? Don’t let your score keep you in those brackets. Improving your credit score isn’t as hard as it seems. It just takes a little patience.
For starters find out what’s reporting to the credit bureaus. A lot of people know what their scores are or perhaps their score range, but not too many know what’s hurting them. When you have no clue what to fix you have no clue where to start. 

Credit Karma provides you with free reporting information from TransUnion and Equifax. It allows you to see the number of accounts you have, past due accounts and any charged off accounts while also providing balances
for each one. 
Although Credit Karma scores aren’t too accurate, the data reporting seems to be very punctual. 

Once you have determined this information you can now move a step closer to improving your score. Listed below are the top three areas that impact you the most and the weight each aspect carries: 
  • Payment history 35% – Lenders want to know one thing, “Will we get our money back?”
  • Amounts owed 30%   – How much of the credit line are you using? Utilizing only 30% of the credit line is always a good measure to keep in mind. Anything over that shows lenders you are a high-risk factor and possibly less likely to repay especially when you have more than two cards over the 30% mark.
  • Length of credit history 15% – How long have you been using credit? Relationships matters in the credit world. Long credit history with a great payment history will help boost your credit score.
Other elements that also play a part are new credit 10% and types of credit in use 10%.

With this information in mind aim to bring all past due accounts up-to-date as soon as possible and bring any that are over the 30% credit utilization under that percentage.

However, if the debt is just too much consider a Debt Management Program (DMP) such as Navicore Solutions, GreenPath or Money Management International.

A lot of people are hesitant to use these services because they fear what it could do to their score. Remember if you are two payments past due and/or have used more than 30% of the credit line your score is also suffering. So why not look into using a DMP?

Some people make the mistake of using a debt settlement agency, which allows your account(s) to charge-off in order to negotiate a settlement. And if your goal is to improve your score a settlement wouldn’t be the best resolution because it causes your score to decrease, and a settlement stays on your credit for seven years from the initial date of delinquency. But with DMP they will start making payments to your creditors as soon as you start paying them, which in turn will eventually bring any past due to accounts up-to-date and start increasing your score.

Once you notice the increase in your score please keep in the mind the time and effort you put into improving it. Don’t make the same mistake of applying for numerous cards and being overwhelmed with debt again. It’s okay to have one or two cards, but take note there is no need for multiple store cards. Remember you can always use any major credit card (Mastercard/Visa) at any retail store. 

If this information was helpful let us know in the comments. We would love to hear your feedback. 

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