One Word Which Well Help Improve Your Credit Score
Thinking of your credit differently could help you improve it nearly effortlessly
Without getting into a philosophical and long-winded speech about time — let’s get straight to the point about your credit.
The title isn’t meant to be clickbait; when speaking with friends and others with bad credit — I inform them one word is more will help them out of their situation.
You’re probably wondering why time of all words.
We’ll start off with the most important factor involving time.
If you’ve ever gotten a 97% on a test in class — you probably weren’t too hung up on the small things here and there which you got incorrect.
But that percentage may as well be an F when it comes to credit scores. Your score can drop as much as 20 points.
You have limited options in the event you do miss a payment, but you can attempt a few remedies.
- The first thing you should do is make sure your payment was actually late. Request documentation from your card issuer or loan servicer to ensure the information is correct.
- If late payments are on your credit report, you can dispute it. You’ll have to do this for all three credit bureaus, but they must conduct an investigation and determine if the information reported is accurate. Be sure to document everything since reporting is time sensitive. (Click here for more information on how to resolve a dispute which may require you to file a complaint with the Consumer Financial Protection Bureau.)
- If you pay your credit card in full every month and something happens e.g. job loss, an emergency etc. — you may have a grace period to pay off a late payment. Always contact your credit card issuer if you will have trouble making even the minimum payment. Be sure to check your contract to see if there is a grace period.
- Send your card issuer a “goodwill letter”. This usually doesn’t work, because card issuers are required by law to keep an accurate report and so they don’t have to oblige. But if you’ve missed a payment or two but have made all of your payments on time over the course of the last year — it won’t hurt to try. You can also call in and speak with a supervisor.
- A pay for deletion might work for a debt collector. You basically promise to pay off the balance in full and they’ll forgive the late payments. But similar to the goodwill letter, your loan servicer isn’t obliged to do this since they have to keep accurate reporting, so there is a slim chance of this working.
If all else fails, the one thing you can depend on is Father Time. Late payments fall off your credit report after seven years. It’s a fairly long time to wait, but late payments have less of an impact on your credit and on-time payments will further improve your score.
Bottom line is: always be on time.
Age of your credit limit
Thinking about closing an old credit card?
Well it could possibly hurt your credit score.
The age of your accounts is but a small factor on your score, but again — it’s in line with the theme of time.
The longer your accounts are open — the better it is for your credit scores.
Time your payments (if you’re not enrolled in autopay)
In a perfect world, we’d all be set to autopay and wouldn’t give our monthly bills a second thought. Being enrolled in autopay cuts down on time spent on bills.
But if you’re not enrolled in autopay — be sure to set reminders.
By law, your payments have to be accepted if it’s submitted by 5:00 p.m. even if it’s on a weekend or holiday. They must accept the payment the following business day. However, this is very rare, because most businesses nowadays accept payments 24/7, but it’s still better to check with your company and ask about their payment policy; you may have a day or two to figure things out if you don’t enough money.
Always give yourself more time to plan things out, because you may have to try and negotiate for a lower payment and take the penalty such as a fee applied to next month’s payment. (Just make sure the company doesn’t count it that payment as a late payment.)
Unrelated to the time theme, but consider enrolling in autopay, and if you can pay more — schedule another payment.
Hard inquiries fall off over time
Hard inquiries are triggered when a business such as a car dealership runs your credit score to determine if you are eligible for a loan.
An inquiry is at the lowest part of the totem pole of credit scoring.
But while they’re harmless at around 2 or 3 — they do start having more of a [negative] impact at higher numbers.
Hard inquiries aren’t always worth fighting as one won’t change your credit score or credit worthiness significantly; and if you have more — they will be removed from your credit report after two years.
30% of the time, it works every time
That reference might be outdated, but it rings true in the world of credit.
A general rule of thumb is to keep your credit utilization below 30 percent at all times.
This is especially true at lower credit limits; you definitely don’t want to utilize 30 percent of $50 ($150).
Admittedly, the time concept might not work as well in this scenario, but one last time-related piece is: spending time on your credit.
Everything a credit repair service does are things you can do yourself. The more time you spend learning and traversing your rights and state and federal laws, the terms and conditions of your contracts, and being more stringent with your finances overall.
Time is of the essence, so make sure you take care of your credit now.
**Disclaimer: This article is not intended to be financial advice and it should not be misinterpreted as such. Always speak with a professional regarding your personal financial decisions.*