by admin /
February 12, 2021 /
Credit Reporting Errors

Improving a low credit score?

A low credit score is attributed to two things either you have very limited credit (ie 1 credit card) or you have bad credit because of negative items reporting.  To improve a low score from having limited credit you simply need to apply for more credit.  This could be starting with introductory credit cards for people who ares new to credit reporting or it could be raising your credit limit on existing credit cards.  Raising your credit limit makes it look like you are more trustworthy and thus raises your score.  The more positive things you have reporting the better your score.  You could also borrow money from a lender or credit card company (no, not to spend) and then pay it off in full after a few months.  Although it will cost you some money to get the loan this little trick makes it look like you obtained a loan, promptly paid it back and are thus more credit worthy.
The second and more challenging alternative is when someone has bad credit because of negative items reporting.  The first step is to stop the bleeding if you can for the derogatory marks.  For example, if you have a history of paying late then you need to start paying on time.  If you can not afford to pay at all then the item will marked as a charge-off or go into collections.  Once an item is marked as a charge-off or collections it does not always make sense to pay them because they will not always remove these accounts and payment will not help your credit.  You need to verify with the company before you pay if they will delete the item.  If they will not and you need a clean slate then start rebuilding your credit through the use of secured credit cards.  These operate as debit cards, with a small annual fee, but they credit report as positive.  Eventually you will be able to move to unsecured credit cards and loans but the important thing to remember is that it takes time. The main factors the bureaus to determine your score are account history (length of accounts), debt to income (how much credit is available to you dependent on how much you spend), timely payments, number of credit items and lack of derogatory marks.  You can get obtain good credit without filing bankruptcy just know that it takes time and energy.