Advice on how to raise your credit score

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READER QUESTION

My fico score is 460, how can i raise my credit score?

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Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

You are one of millions of Americans asking themselves: How can I raise my credit score or raise my FICO score.

You have a few options on how to improve your credit score, but they basically fall into two main categories: 1. clean up bad and inaccurate information, or 2. re-establish solid payment history on new tradelines and maintain financial stability.

While I cannot tell you when your credit score will improve, I encourage you to continue making your monthly payments in a timely manner, as the longer you make payments, the more positive influence the accounts will have on your credit history. I encourage you to regularly obtain copies of your credit reports from the three major credit bureaus (Equifax, TransUnion, and Experian) to verify that all listings appearing on your report are accurate. If you find any inaccurate credit listings, you should dispute the item with the credit bureau reporting the information.

If it would help you for future knowledge, I can help you to understand how your credit score is calculated. Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history.

Without contesting, all items remain on your credit report for up to 7 years. A bankruptcy may remain on your credit report for up to 10 years.

For you to start seeing improvements, here are some things you perform:

1. Pay off all debts and keep revolving lines below 25% utilization and certainly don't 'max out' any loans or cards.

2. Get a small store card or gas card or credit card and make payments every month {this will help you re-establish a track-record of positive payment history}

3. Write a letter to the three bureaus (Experian, Equifax, Transunion) explaining your situation and why you are now in a good credit situation.

4. Pull your credit report and contest to remove any inaccurate information.

These are a few of the considerations. If you would like more information about a solid financial game plan, I have enclosed our FREE budget and personal finance guide for your perusal.

To learn more about credit reports and credit scoring, I encourage you to visit the Bills.com Credit Solutions and Resources page at http://www.bills.com/credit/.

I wish you the best of luck in rebuilding your credit history. I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.Bills.com

Comments (5)


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Bills.com
August 23, 2010
You wrote, "Under the FCRA, the Fair Credit Reporting Act, the credit bureaus need to provide you with a copy of verifiable documentation if it is requested by you as the consumer. The three credit bureaus are required to have a copy of that same verifiable proof. You simply have a right to receive a copy of the Original Creditors Documentation." I cannot find this type of language in the Fair Credit Reporting Act, and am very curious where in the Act this can be found. Please cite where I may find this. Thank you!
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Brian F.
August 23, 2010
Did you know that 70% - 90% of all credit reports have errors on them? In fact, the vast majority of negative items on a typical credit report are valid. Therefore, if you simply dispute all the negatives on your credit, those items that are valid will most likely be verified by the creditors and remain on your credit report. It doesn't matter whether the negative credit item is valid or not. Anyone can dispute the credit reporting agencies' right to report the negative credit item, not whether it is valid. Since none of the 3 major credit bureaus (Equifax, Experian and Transunion) are in compliance with Section 609 of the Fair Credit Reporting Act (FCRA), they must remove all unverifiable items from your credit report - ALL OF THEM! Every "credit repair" company out there uses the dispute process allowed under FCRA to attempt to repair your credit. By disputing the accuracy of items on your credit report you are essentially playing the slots - you are hoping that all three credit bureaus are unable to complete their investigation within the time allowed. The odds of all three bureaus is nearly impossible! You are disputing the reporting law - not whether or not an account is yours, but whether or not the credit bureaus have that verifiable proof they are required by law to have on that account. Under the FCRA, the credit bureaus need to provide you with a copy of verifiable documentation if it is requested by you as the consumer. The three credit bureaus are required to have a copy of that same verifiable proof. You simply have a right to receive a copy of the Original Creditors Documentation. When you request that same verifiable proof from the creditor, they usually comply very quickly and will often times fax or mail you a copy of your account application/history within 24 hours. Here is what we is VERY interesting! Anyone who uses this process will NEVER RECEIVE a single copy of verifiable proof on a single client account! They do not have them on file! All credit bureau reporting is done electronically via email or fax. But that is NOT what the law says must be done.
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Brian F.
August 21, 2010
Our credit scores can be raised legally and easily. It takes the right proprietary information to get the job done. Thank you for your blog as a clearinghouse for information.
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Jim W.
July 08, 2010
This is a great article.
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Raise M.
November 07, 2009
Hey is this easy to raise my credit score.. i searched on lot of sites but don't find any information...
Thanks for your feedback!

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