How To Get Rid of a Low Credit Score

By Subodh / March 19, 2010

Your credit score shows your record to put down payments within time, and a low score means that you might not get further loans from creditors, and that can stop you from getting new loans, or re-take a mortgage. To avoid this, change the way creditors see you.

Step 1: Guide Questions

Convince people that you are good credit. You cannot do this until you see some hard facts. So you’re your credit score ready. You will have to convince the companies and banks that you are a sound investment for them, and they would earn profit by giving you money. Remember to ask yourself a good set of questions before facing them, because they would ask you the same.

• What is the current credit score you have?
• Can you give any reason for making your payments later than most people?
• How long is your credit history?
• Is there any outstanding debt to your name? Justify your answer, even if it is a no.
• How many credit accounts do you have in total?
• Have you had a profitable venture in recent days and how feasible are they?

Remember, these questions are really important, because you are assessing your own problem areas as the prospective debtor. If you have more than one credit account, then you have better chances of scoring.

Credit Score

Step 2: Pay Your Credit Card Debt

Remember to pay your credit card debts because that the largest hit of your credit score. You should address it right at first, and what you should do is lower it drastically, by allocating some cash to it. Go down at least 30-35% below your total credit limit. This would not go unnoticed by your company, and they would have faith in you.

Step 3: Be a Responsible Buyer

If you are an impulsive buyer, then you should curb your impulses. They never make you buy good things, and you end up losing quite a bit of money. So before doing some impulsive shopping, ask yourself whether you need it or not. Do not try to get something with your card. Use cash, and pay for what you buy then and there. Try these and get into a good credit rating scene. Paying up on time and reducing credit balance are the best way to regain your credit scores.

Step 4: Customer Loyalty

Do not cancel your cards if you have paid off the debts. Select the best and keep them. Throw away the ones that give you trouble. Keep them with you, and remember, the longer you hold one, your credit score would be higher and stronger.

Step 5: Bury Your Negative Credit History in the Past, Literally

Start buying little things, and pay for them out of your card, but keep equal amount of cash in the bank to pay for them as soon as the month is over. This would zoom up your bad credit scores instantly.

Step 6: Disputes and Settlements

Settle the problems you might have had with one or more of your old debts. Talk to the people if you think you have been dealt with too harsh, and make them aware of your dislike of it. You would see that the creditors would respond and sort things out. Be reasonable, do not be negative, and be scrupulously polite about it.

A Good Plan Warrants a Good Score

Once you do this, your credit scores would again go up and be restored.