Your credit score comes from five major areas--your payment history, the type of credit you have, your balances, the length of your credit accounts and the presence of new accounts. You have the most control over your payment history and balances, which fortunately have the biggest effect on your credit score (35 and 30 percent, respectively). If you start taking care of your finances and paying your bills correctly, you can increase your credit score.
Order a free copy of your credit report. Pay particular attention to your past payment history. The report will tell you whether you made payments on time or 30, 60 or more than 90 days late. Late payments negatively affect your credit score.
Bring any overdue accounts current. Send in the full amount that you owe. If you do this, you may be able to ask the company to remove the negative marks on your credit report, especially if you have typically been a good customer before this incident.
Send your bill payments as soon as you receive the bill in the mail. If you wait, you might forget to send it off, causing another late mark on your credit report. Sending it in immediately ensures that it will be there on time.
Apply extra money towards your debts. Since the percentage of your available credit that you are using affects your credit, paying it down will increase your score.
- It will take time to rebuild your credit score, even though you are now doing everything right. Old negative marks will stay on your report for seven years.
Maggie McCormick is a freelance writer. She lived in Japan for three years teaching preschool to young children and currently lives in Honolulu with her family. She received a B.A. in women's studies from Wellesley College.