Ways to Build Your Credit Score

Everyone’s credit is measured and scored. The higher the number, the more confidence lenders have that a person will be able to repay their debt on time.

If you’re just starting out or if you need to rebuild your credit, you can get a secured credit card. This type of card requires you to keep a minimum balance in a savings account to secure the card. For example, if you keep $500 on deposit, you can get a credit card with a $500 credit limit. Be sure to pay the full balance on your card each month so you can avoid paying interest.

There are a few other steps you can take to stay on top of your credit score or rebuild your finances.

Check your report annually 

You should get a copy of your credit report at least once a year from all three credit bureaus to verify that the information is correct. You can do it most quickly at www.annualcreditreport.com. If anything looks suspicious, take action.

Dispute any false information

While no one can legally remove accurate and timely negative information from your credit report, you do have the right to request a re-investigation of the facts and to dispute inaccurate information. You should contact the reporting agency for a dispute form or send your own letter with a copy of your report. You’ll need to clearly show which items you are disputing and why you dispute them. Here is a sample dispute letter.

Clean up negative information

Negative information in your credit report can hurt your ability to get credit or get the best loan interest rates.

You can take steps to clean up, or resolve, some negative information. This includes the following:

• Delinquent accounts
• Accounts in collection (this can include medical bills, phone bills, etc.)
• Criminal records
• Lawsuits against you
• Court judgments against you
• Late payments
• Child support that has not been paid

This information stays in your credit report for seven years. Some information can stay on your report longer. 

This information is from our Financial Fitness course. Would you prefer to watch a video? If so, click here.