How to improve my credit rating?

Question

I'm 19, and I have a pretty bad credit rating, what can I do to improve it?

Answer 1

The Entropy, I recommend you visit a local credit rebuilding service. http://www.tipstoimprovecredit.com They should offer you advice to help improve your credit.

Answer 2

Make your payments on time, make sure your outstanding balances stay below 50% of your credit limit.  Don't take on anymore debt.

Answer 3

Hi there!

Here are the things you can do in order to improve your credit rating and have a good score :

1. Correct blatant mistakes. Your credit score is only as good as what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan. Changing a mistake on your report - such as a payment that is wrongly labeled as late -- can take 30 days to three months, sometimes longer.

2.Pay your bills on time. This is always a good practice, and it's especially critical that you make prompt payments close to the time you need a loan. That's because a late or missed payment in the last few months is likely to lower your score much more than an isolated late payment five years ago.

3.Reduce your credit card balances. A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it's good to keep your balances at or below 25 percent of your credit card limit, said Jeanne Kelly, founder of The Kelly Group in Brookfield, Conn., which helps clients improve their credit scores.

4.Pay off debt rather than moving it around. Since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score. In other words, say you owe a total of $2,000 on four credit cards, each of which has a $2,000 limit. Your total credit limit is $8,000, of which your total balance ($2,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $4,000, and your $2,000 balance now accounts for 50 percent of that limit.

5.Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score since you don't have a proven track record, said Jan Davis, an executive vice president at TransUnion. What's more, a new account will lower the average age of your accounts, another factor in your FICO score.

I hope it help you!

Answer 4

Pay off all outstanding debts, then get a secured card through your bank and use it VERY VERY cleanly over a period of time.

Answer 5

start with paying off what caused you to have bad credit. Even if it is only $50 a month. Pay on it....every month...on time. Once you have gotten that taken care of you need to secure another line or credit somehow. Whether it be a credit card, auto loan, ect. If you get a credit card use it very carefully. Maybe only use it for gas. Pay every month more than the minimum due and always always on time. After a little while when you can prove you are credit worthy you credit score will improve and you can then negotiate a better interest rate....since no doubt yours will be high due to your history. YOu are young enough to fix this so DO IT! Don't put it off. i talk from experience, if you don't fix it now you will be sorry later in life. Hope I could help and best of luck to you!

Answer 6

To improve your credit you need to understand what makes up your score.

1. Payment history  35%

2. Time in bureau  15%

3. Types of credit  10%

4. New credit  10%

5. Debt to credit ratio  30%

As you can see 1,2 & 5 are the most important as far as score goes. You need to have your credit card balances at 30% usage or less and always pay on time and in full if possible.

To have the best score/profile people need 3 credit card accounts (revolving) with balances below 30% of their limits and 2 cars, boats, homes, computers, furniture or personal accounts (installment) all with good long pay history's.

If some of your accounts have gone to collections, do not pay on them until you have a written pay for delete agreement this simply says that in exchange for your payment they agree to remove the accounts from your credit report, paying old collection accounts without this agreement does nothing for you score except actually lower it because the accounts become current rather then old.

Remember 90% of credit scores are made up of the last 24-months of activity so you have time to fix this.