Whether you’ve declared bankruptcy or simply made a few late payments, if your credit score needs a boost, you can expect it to take one to four years of rebuilding before you hit the high notes–a score of 760 or higher. This is where you want to be, so you have lenders falling over themselves opening doors for you, offering the best interest rates. The sooner you take action to start repairing your credit, the sooner you will see the benefits as navigating the world of credit becomes easier for you. If you can, do the following:
Pay off any credit cards that are close to their limits.
Pay off as many of your other credit cards as well. As a general rule, you should be trying to keep your balances limited to 30% of the available credit, as the ratio of credit used to credit available is a key factor in your credit score.
If you don’t have an installment loan of some kind, try to get one.
These include auto, personal loans, student loans and mortgages. If you can’t qualify by yourself, ask if a friend or family member will co-sign for you. Having a mix of instalment and revolving credit (credit cards) looks good on your credit report, as long as you use both responsibly.
Of course, if you don’t have a credit card, you should get one for the reason stated above.
Use old credit cards.
If they don’t have great interest rates, use them sparingly. But the older your accounts are, the better it looks on your report. And if you don’t use a card for a while, the creditor may close the account on you, or simply stop reporting that account to the credit bureaus.
Check the credit limits of your accounts on your credit report.
If your credit card limits or lines of credit have been increased but this hasn’t been noted in your report, ask your creditor to report the increase to the bureaus. Again, the more available credit you have showing on your report, the better.
Dispute any errors on your report.
Ask your creditors for goodwill adjustments, if you have a late payment or two noted on your report but you’ve consistently made on-time payments for the past year.