Better Credit Score Helps Your Business
2. Get current. Eliminate any delinquencies on your credit report. Your report should clearly categorize them as 30-days, 60-days, 90-days delinquent, etc. The more delinquencies on your report, the lower your credit score. Contact your creditors and get rid of them. If you cant pay them all off, you may be able to get them to list your account as settled by offering a lump sum. Settling an account is not as good for your credit score as paying the account on time in the first place, but it is better than a default or charge-off listing.
3. Get a credit card or even two. Put a balance on each of them and pay it off responsibly. You dont have to carry a large balance. Just enough to show that you are organized and responsible enough to reliably pay back the loan.
4. Buy something on payments (e.g. vehicle, appliance or other big-ticket item). This is different from a revolving credit card balance. Your ability to handle different kinds of creditincluding both revolving and non-revolving debtis a factor in your credit score.
5. Pay your bills on time. This is obvious, of course. But it bears repeating. A big part of your score comes from avoiding late payments. This isnt just to credit card and finance companies; you also need to demonstrate your ability to reliably pay your utility bill, cell phone bill, Internet bill and, in some cases, your landlord.
A past history of late payments can damage your credit score. Putting more time you put between you and your last late payment helps improve your score.
6. Nurture your longstanding relationships. Long-standing accounts with the same creditor improve your score. If you have to close an account, close the newer one first.
7. Dont close accounts just to raise your score. Doing so may actually increase your credit utilization ratio. This is the percentage of available credit actually used. This number should be lower than 35 percent. When you close an account, you actually raise your credit utilization ratio.
8. Be patient. The process takes time.
