10 More Ways to Improve Your Credit Score

It's hard to improve your credit score without positive information on your credit report. If you’ve had trouble getting approved, find a credit card for bad credit or get a secured credit card. Be careful, if you already have open accounts that you can’t handle, don’t get a new credit card until your current accounts are under control.

Some credit unions offer a product called a credit builder loan. The you borrow is put in a savings account and serves as loan collateral. You make monthly payments on the loan and when it’s paid in full, the money in the savings account, plus the interest earned, is yours to keep. In the meantime, the credit union reports your monthly payments to the credit bureaus.

Your credit utilization – how much of your available credit is being used – is 30% of your credit score. The closer your balances are to your credit limit, the worse it is for your credit score. If you have a lump-sum of cash you can use to pay on an account, put it toward a high balance. (If you have to choose between paying a past due balance that hasn’t yet been charged off or paying down a balance, pay the past due balance.)

Review your credit card accounts and pay down any balance that’s above 10% of the limit (30% of the limit is good, but 10% is ideal). For example, if you have an account with a $1,000 credit limit and a $700 balance, that account needs to be paid down.

If you have negative accounts that have already been paid, ask the creditor to remove the account as a matter of goodwill. It helps if you can find a specific name and address of someone at the credit card company rather than send the letter to the general correspondence address.

If you can pay off a past due balance or collection account in full, ask the creditor to remove the account from your credit report in exchange for payment. This is called a “pay for delete.” If the account is still open, the creditor may agree to re-age it. Be polite when you ask for this favor and don’t get angry if the creditor refuses.

Most negative information can only be reported for seven years. Items older than seven years may not disappear automatically. You can use a credit report dispute to have old, negative items removed from your credit report. Note that Chapter 7 bankruptcy can stay on your credit report for 10 years. In California, tax liens (paid or unpaid) can be reported for up to 10 years.

Pay at least the minimum on all your accounts, even those that aren’t on your credit report. Any past due balance can ruin your credit if it’s sent to a collection agency, who almost always reports accounts to credit bureaus. Delinquencies hurt your credit score less as they get older so reinvigorate old delinquencies by missing a credit card or loan payment.

Debt collectors must verify your debts if you make the request within 30 days of the first phone call or letter. After the collection agency receives your validation request, they can’t add the debt on your credit report until you’re sent proof that the collection agency can collect on the debt. This may only be a temporary fix, as the collection agency can report your debt once they’ve validated the debt.

When you check your credit score through sites like CreditKarma.com (free) or myFICO.com (pay a fee or sign up for a free trial), you’ll get a summary of the factors that negatively affect your credit score. Both have simulators that show how your score could change based on specific actions.