Sitting down to write out your New Year’s resolutions? If you want 2015 to be one of your best years, financially speaking, you definitely need to add improving your credit score to that list.
Not only will increasing your credit score get you better interest rates on things like automobile loans and home mortgages, it can even help you to get a job and/or rent an apartment, as well as many other things. So, with that in mind, here are a number of things you can do to increase your Credit Score next year. Enjoy.
First, if you have past due accounts of any kind, you should pay them off in full in 2015. The reason is simple; nearly 35% of your credit score is based on your credit history. You can start by getting a copy of your credit report from the “Big 3” credit reporting agencies and checking to see which accounts you have that are past due. Pay the ones that are the furthest overdue first and, as they get paid off, keep going with the next until all of them are paid off.
Speaking of late payments, even if you are a very conscientious consumer and pay your bills on time, occasionally you might forget and make one or two late payments, which can of course hurt your credit score. If this happens, you can simply call your creditor, whether it’s utility company, credit card or the auto loan from your bank, and ask them for a “good faith adjustment”. If you’ve been a good customer all along, and have made nearly all of your payments correctly and on time, many lenders will remove the late payment notice from your credit report, instantly boosting your score.
Improving your debt to credit ratio is another task that should be on your ‘to-do’ list in 2015. This is the amount of money you owe versus the amount of credit that lenders have made available to you, and the lower that number is, the better. While you might think that there’s no way to increase or improve this ratio, there are a number of ways including;
- Asking for a credit increase
- Moving the balance of that from one card to another
- Taking out a personal loan and consolidating all of your debt
Lastly, if you have any accounts that have been “charged off” or sent to a collection agency, do your best to pay those off because they have a huge, negative impact on your credit and credit score. If you are close to the seven-year limit, it might not be worth it but, if you have an account that was just charged off or sent to a collection agency in the last one or two years, it’s definitely worth paying it off instead of waiting until it gets taken off automatically. (Besides that, paying back your debts is the morally right thing to do.)