If you’re looking to get approved for a mortgage, auto loan or credit card in the near future it’s imperative to know what’s going on with your credit score. If you have a high student loan balance, late payments on credit cards, or any collection agencies showing up on your caller ID, chances are your credit score can use a little help.

You may feel helpless and unsure of what actions to take when discovering your credit is poor. You may also be wary of credit repair companies that offer to help while making money from you while doing so. The fact is that you can raise your score on your own. Follow these seven steps listed below and work your way back to financial independence by upping that credit score.


1. Know where you stand

Figure out what your current credit score is. Everyone is entitled to a free credit report from all three bureaus. Experian, Equifax and Transunion are all legally required to allow you to obtain one free credit report per year. You can visit www.annualcreditreport.com to view your full reports. Credit scores range from 300-850. Ideally you’ll want your score to hover in the high 600s and above. If you’re at 680 or lower continue taking steps to better your score.


2. Dispute errors on your credit report

Errors on your report are not common, but they do happen. In some cases you may have a payment marked late that you actually paid on time. Perhaps you have a debt showing that is older than 7 years and should therefore no longer be listed on your report. Make sure you dispute these claims, which can be done on the company websites or through mail.  If disputing by mail write a letter to the specific credit reporting agency that shows the falsehood, whether it is Experian, Equifax or TransUnion. Explain the mistake and include a copy of the highlighted report along with your documentation proving the claim.


3. Pay your bills on time!

Payment history is the single largest factor that affects credit scores, and late payments can stay on your credit reports for seven years. If you miss a payment or make one more than 30 days past the due date it would be wise to contact the creditor and ask them not to report your misstep to the bureaus. To offset late payment mistakes it is important to show positive credit habits going forward and late payments won’t negatively impact your score as much over time.

“The fact is that you can raise your score on your own.

4. Make frequent payments

Make small payments, or micropayments, throughout the month. These can help keep your credit card balances low and improve your credit. Making multiple payments during the course of the month moves the needle on a credit score component called credit utilization. In addition to payment history, this is another factor that highly influences your score. If you’re capable of keeping your utilization low as an alternative to allowing it build toward a payment due date, it should benefit your score immediately.


5. Get a secured credit card

Another method that can be used to enhance your credit is getting a secured credit card. This kind of credit card is backed by a cash deposit. You pay the cash deposit before the card is issued and the deposit amount is typically the same as your credit limit. The purpose of the secured card is to use it like a normal credit card, and your timely payments up your credit. Choose a secured credit card that reports your credit activity to all three credit bureaus. Having such a card is a tried and true, proven method of repairing your credit.

Self.inc is a new FinTech solution that, like a secured card, can help you build your credit history and improve your credit score. When you open up a Credit Builder Account with Self.inc your timely monthly payments build your credit history and at the same time adds to your savings account. It’s also a great way to help you increase your savings, which get unlocked at the end of the program. Keep in mind that there is a $25 per month fee to use their program.  


6. Keep your current credit cards open

When in the process of repairing or improving your credit, closing your current credit cards can make the journey to a better score more difficult. Closing a credit card means you lose that card’s credit limit when your total credit utilization is calculated, which may lead to a lower credit score. Keep your current cards open and use them once in a while so the accounts won’t be closed by the card issuers.

7. Other than a secured credit card do NOT apply for any new credit

Despite possible store discounts or supposed member rewards, please resist the urge to apply for new credit cards (other than one secured card account as previously discussed). Every time you apply for credit it’s listed on your credit report as a ‘hard inquiry’ and if you have too many inquiries within two years, your credit score will be negatively affected. In general, a consumer with good credit can apply for credit a few times each year before it begins to affect their credit score. If you possess poor credit however, these inquiries can have a more significant impact on your score and pause your aim of watching your credit score increase.

7 Steps to SELFi

The increase in conforming loan limits provides an opportunity to better your financial situation with a refinance.

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