How to Increase Your Credit Score: 3 Step Process

If you are looking for a magic potion that will increase your Credit Score overnight well you are looking for it in all the wrong places. I hate to break it to you there is no overnight solution to a low credit score. First off there is no need to panic, you are not the only one with this problem there are millions others in the same boat as you. But, the only difference between them and you is that you are on the right path of seeking help. Before you decide what you should do, first you need to realize the extent of the problem. What actions or lack of actions caused your low credit score? Was it not paying bills on time? Was it that you lost your jobs and you could not pay all your bills? Too much debt accumulated? Divorce? Loss of a loved one? There could be a number of other reasons but lets move forward and what you can do differently. Since you are here you have chosen to do something about it and I commend you for that. It is a process, it doesn't matter in which order you take the steps just as long as you do take the steps.

Sounds easy enough, but its not when you are constantly writing checks to your creditors. You are bound to make mistakes when you are not organized and have a game plan to tackle all those bills stacked up on your counter. First collect all statements you've received, scan through all the dates. Now using a calendar write down for month ahead which bills are due on which date. Usually the dates do not change from month to month. I use Google Calendar, it is very simple to setup and easy to add reminders. I can glance at the calendar and all the bill due dates are right in front of me. If you prefer a more hands on calendar you can buy one from the dollar store and write in all your bills due dates, however that makes things cumbersome and overtasking. Remember paying your bills shouldn't be tasking on you.

After you've scheduled everything on the calendar its time to automate your bills. The problem I find with paying billings via checks is that it takes days the money to be withdrawn from your bank account. This can be bad because if you've used money that was supposed to go to paying bills on other purchases and your creditor withdraws from the check you've return you'll end up paying for the overdraft and it could end up costing you in the long term. Face it, no one likes to pay the bank to use your own money let alone paying them for penalties & fees.

You can easily avoid this by setting up Online Bill Pay with your bank. Majority of banks now have this feature, if your bank does not. It is time to move on from that bank. All you need to do is provide your account information from the various bills you've received and you will be set to go. Now you can pay your bills online and not have to worry about your mailed check not getting lost.

If you are new immigrant to the United States or you just turned into an adult then hopefully these tips are helpful to you. Building your Credit Score takes time, like I said earlier it is not an overnight thing. First you need to take a vow that you will not ruin your Credit Score. It is a hard road to climb if you do. Now here are some tips on building your Credit Score. Open a credit card, definitely read the fine print before signing up. Make sure the credit card is the right fit for you. The way to build credit is via making payments on time on the credit card. Of course don't go overboard and buy beyond your means because thats how you accumulate debt. If you are buying a car make sure you can either sign for the loan yourself or find yourself a co-signer. Remember, if you can't pay for it, you can't afford it. If you have a cellphone via make sure you make those payments on time. Basically avoiding late payments, too much debt and you should be fine. Once you have a decent Credit Score it is just as important to maintain it in that way.

The reason you might be in the predicament right now could be because you have not kept tabs on your Credit Score. But don't worry, many people have no idea what their credit score is. You can easily get your Credit Report along with your Credit Score for free or for a low fee. Many banks and credit card companies offer credit protection plans between $7 - $10. You can also get a Free Credit Report without paying for anything. Why is monitoring your Credit Report / Credit Score important? Well depending on your credit score lenders can choose to deny you a loan. If you debt to asset ratio is too high then you will hurt your credit score.

What can you do? For one stop accumulating debt. If you can't pay for it with cash, you can't afford it. Don't cancel all your credits just yet, instead stow them away, you can even cut them up. Canceling your cards all at once won't help your credit score because all you are doing is increasing you debt to asset ratio. Once you have checked your credit score you know where you are and where you need to get to.

I hope this hub was helpful to you. If you have any questions or comments feel free to leave them in the comments section.