How to Improve Your Score Beyond Credit Repair
There are a lot of reasons that your credit may be in rough shape. Most are related to your spending habits. And, if you missed a few payments or your debt levels are too high—think over 30% of your total available credit limits—disputing errors probably won’t help you. You’ll have to make some additional changes to help improve your credit scores instead. And you may have to wait a bit to see an uptick.
Most negative information can take up to seven years to age off of your credit report, though the effects on your credit score will lessen over time, so long as no new blemishes emerge.
That shouldn’t dissuade you, however, from getting started. Remember, a bad credit score can cost you some serious cash. Over your lifetime, you can lose thousands of dollars to a bad credit score.
Bad credit means higher loan interest rates and higher insurance premiums and that all adds up over the years. Bad credit can hold you back from achieving major life goals like buying a house, going back to school, taking a dream vacation, or even retiring when you want. Fortunately, you aren’t necessarily saddled with bad credit for life.
In This Piece
How to Maintain Your Credit Health Over Time
How can you maintain a healthy credit score over the long term? Here are some simple steps you can follow to keep your score up:
1. Follow a Budget
Bad credit usually stems from bad budgeting practices. Avoid spending yourself into debt by following good budgeting principles. A general rule of thumb is to allocate 50% of your monthly income to fixed spending on necessities such as rent or mortgage, 20% to paying down debt or building up savings, and 30% to variable spending on items such as dining out. Your financial advisor can help you adjust this based on your needs. Following these guidelines will help you avoid spending beyond your means and getting into more debt than you can afford. Use a budgeting app to help you stick to your budget.
2. Pay Your Bills on Time
Paying your bills on time will go a long way toward maintaining healthy credit. Setting up automated payments can help ensure that your bills get paid on time.
3. Keep Your Balances Low
Keeping your credit utilization low will help keep your credit score high. Spending up to 30% of your limit is about as high as you should ever let your balances go. Keeping it closer to 10% will have a bigger boost on your credit score.
4. Apply for New Credit Accounts Strategically
A good mix of loan and credit products can help raise your credit score, but applying for too many offers at once will lower your score. If your score is currently low, start with a secured loan or secured credit card to build your credit. As your credit improves, consider options such as balance-transfer credit cards or loans to pay down cards with high-interest rates. Avoid applying for too many offers at once, however, and check your credit score when deciding whether the time is right to apply.
5. Keep Accounts Open to Let Them Age
A history of long-term responsible account management helps raise your credit score. Keep your accounts open to let them age and build your credit.
6. Follow Good Security Practices
Identity theft can hurt your credit without you even knowing it. Protect yourself by following good security practices, such as keeping software updated to install the latest security patches, using antivirus software, using firewalls and virtual private networks when conducting online transactions, keeping passwords to yourself, and avoiding suspicious links.
7. Sign up for a Credit Monitoring Service
Actively monitoring your credit will help alert you to identity theft incidents and other negative events which may impact your credit. The best way to stay on top of your credit is to sign up for a credit monitoring service that can handle this for you automatically and send you instant alerts.
Key Points to Remember About Credit Repair
- It can be difficult to navigate the complex world of the credit industry yourself, especially when it comes to disputing negative information on your credit file.
- Don’t expect results overnight. Credit repair takes time and requires regular credit monitoring and a change in how you approach your personal finances.
- It’s never a bad idea to consult with a credit expert if you’re unsure of a law or any methodology regarding credit repair and credit services.
- Dealing with debt also goes hand-in-hand with taking a closer look at your spending habits and finding ways you can fall back and save.
- The credit repair process is lengthy and requires patience, especially if you have a sizable credit history.
- If you do enlist the services of a reputable credit repair firm, such as Lexington Law Firm, you can cancel the service at any time.
- Educate yourself on your rights as a consumer, including on what the Federal Trade Commission and Credit Repair Organization Act are.
Affiliate disclosure: John C. Heath, Attorney at Law, PC, dba Lexington Law Firm contracts with Progrexion Holdings, the owner of Credit.com, to provide administrative and business support. Credit.com may receive compensation if a subscriber signs up for Lexington Law Firm services.
