A three-digit number has a significant impact on your life. Your credit score determines whether or not you qualify for loans, and at what interest rate. It plays a part in your ability to rent an apartment and get a credit card. A poor credit score can even prevent you from landing a job. The higher your credit score, the more likely you will have a comfortable financial present and future. 

Many Americans have credit barriers. Improving your credit score requires attention and time, but it can be accomplished with guidance and a plan.

You do not have just one credit score. In fact, you likely have dozens. A credit score is calculated by applying a algorithm to one of your three credit bureau reports. There is not a uniform algorithm used by all lenders and financial companies. The FICO Score, which is the most commonly known credit scoring model, is just one of many.

Though the subject can be complex and confusing, the bottom line is that the variety of scoring models are similar. Typically, what impacts a score is mostly the same. Most credit scoring models consider your payment history on credit cards and loans, the amount of revolving credit you use, the length of time your accounts have been open, the types of accounts in your name, and the frequency that you apply for new credit.

Here are steps you can take to improve your credit scores:

Check your credit scores online

An ideal starting point is to check your credit scores online. Once you learn your scores, you will receive details about factors that are impacting your credit the most. This will help you understand the changes that must be made to begin increasing your scores. Payment history and credit utilization ratios are among the most crucial factors in most credit scoring models. Remember, a credit score reflects payment patterns over time, and there is a greater emphasis on recent information.

Commit to paying bills on time

Lenders are especially interested in whether or not you pay your bills in a timely manner. You can positively shape your credit’s present and future by paying your bills by the due date each month. Late payments derail your goal to improve your credit scores. Use automatic payments or calendar reminders to help. If you are behind on any payments, bring them current as soon as possible. Older late payments have less negative effect than recent ones.

Pay off debut and keep balances low

The credit utilization ratio is calculated by adding credit card balances and dividing that amount by your total credit limit.  Lenders generally prefer ratios of 30 percent or lower. You can enhance your credit utilization ration by paying off debt and keeping credit card balances low, and becoming an authorized user on another person’s account. Only become an authorized user if that person uses credit responsibly.

Apply for and open new accounts only if needed

Unnecessary credit can hurt your credit score in numerous ways, including creating too many hard inquiries on your credit report to tempting you to overspend and accumulate more debt. Think of the long-term impact before applying for an account you do not need.

Keep unused credit cards open

As long as they are not draining your account with excessive annual fees, keep unused credit cards open. Closing an account may increase your credit utilization ratio. 

Dispute inaccuracies on your credit reports

Equifax, Experian and TransUnion are the three credit reporting bureaus. If there are inaccuracies when you check your credit reports, dispute the information so it can be corrected. Inaccurate information can damage your credit scores.

Hire a reputable credit repair company

You can invest your time into the multiple steps of rebuilding your credit on your own, or you can work with a reputable credit repair company that will give you peace of mind by handling the process. Just as you could change your own oil, and make your own car repairs, or take your automobile to a professional, you have the same option with credit repair. You can save time by hiring a professional who has the knowledge, experience and tools to effectively achieve your credit repair goals.  

Fresh Start Financials Group provides a variety of credit resolution services, including:

  • Basic Credit Repair, which removes any derogatory account items such as late payments, repossessions, and bankruptcies.
  • Intermediate Credit Repair, which removes any derogatory account items such as late payments, repossessions, bankruptcies and inquiries; and adds positive tradelines.
  • Advanced Credit Repair, which provides everything above, plus offers loan and credit card pre-approval.