Tips for improving your credit score

Credit scores are not only used for large purchases in life, such as buying homes and vehicles, but can also be a deciding factor in whether or not you’re approved for home or apartment rentals, the size of your security deposits, auto insurance costs, cell phone plan approvals, and much more. If you’ve found yourself with a less than desirable credit score.

Here are a few tips for getting your credit history back on track.

Monitor your credit

Being aware of what exactly is reported to your credit is the first step to repairing your score. Many people are under the false impression that only unpaid debts that have been sent to collection agencies are reported to credit-reporting agencies, but repayment history is only a portion of the data that is reported.

Credit scores are based on a multitude of financial histories, such as payment history (good or bad), amounts still owed to debtors, age of accounts, types of credit currently available to you, the percentage of available credit that’s being utilized, and income.

Work towards eliminating loan balances

While paying off all loans may not be an option, create a plan to pay down loan balances as quickly as possible. If you find yourself juggling credit cards in order to keep all balances low, consider picking a credit card with the best interest rate and only using that card for future purchases while you pay off the other credit card balances.

Credit-reporting agencies look at exactly how many credit cards have balances, and it is more favorable to have one card with a higher balance than all cards with small balances. According to, this method works that way, you’re not polluting your credit report with a lot of balances.

Find lenders who will work with low credit scores

Repairing credit history and FICO scores is not an overnight process. While you’re working hard to improve your score, research lenders for your current needs that are willing to work with less than favorable scores. There aren’t any lines drawn between good and bad credit scores, and each lender will have different requirements.

Often times credit unions will take a look into exactly what is bringing your score down, and determine your eligibility based on your most recent actions. A score may not be improved until negative accounts have been dropped from your report, but if you’re able to show that you’ve been able to make payments on time recently, and are working towards good credit then you’re more likely to find a lender who will work with you. You can find the right kind of financing if you only know where to look.

The challenge of acquiring good credit is not an easy one, and while there aren’t any quick fixes, hard work and persistence will pay off. Keep your end goal in mind, whether it is a home loan, new vehicle, or personal loan; and continue to monitor your score, pay bills on time, reduce credit card balances, and discover lenders who will work with you.