Over the past year, I’ve been able to transform from Credit Standing though good habits, budgeting and discipline. I purchased my home, got approved for a 0% interest loan on my car, and overall get way more “You’re Approved” letters than I use to. There was a point when I could barely get approved for a $100.00 credit line. Today, I have credit that is equivalent to some people’s annual salaries. I’ve learned not to spend what I cannot pay back in cash and to pay my creditors ON TIME.

I subscribed to Equifax’s Credit Monitoring service to stay up to date on my score and changes to my report. Additionally, I created an account at CreditKarma.com (which is free). Once a year, I also obtain a FREE copy of my credit report (from all 3 credit bureaus) at: ANNUAL CREDIT REPORT.

I am posting a few tips and things that were helpful for me in hopes that it will help others. However, the most important thing to keep in mind is that this process is about DISCIPLINE. You have to make a decision that you are going to FOCUS on making things better and really ACT on your desire to fix things. Personally, I have enjoyed so many more opportunities because of the choices I’ve made about my credit. You can too.

As of today, my score is 715. I can remember a time when it was 520, so don’t be discouraged. I plan to continue to increase my score through the habits I’ve created. Check out these tips and feel free to let me know if you have any specific questions. I’ll do my best to continue to post resources on this topic….

1)      If you have accounts in “Collection,” DO NOT contact them unless 1) you are CERTAIN that the debt is invalid and can be removed 2) you have the money NOW to pay off the debt. Here’s the reason why:

Most Collection Agencies don’t update your account status that often. You may even have accounts that haven’t been updated for years. As soon as you contact these agencies, they will “update” the status of the debt on your credit report thus causing your score to drop even lower than what it already is. In terms of improving your score and being approved for new credit, you want to make sure that all of the Collection Accounts on your Credit Report are deleted or settled (preferably with a zero balance).

Here are some tips on how to Negotiate With Collection Agencies:

2)      Evaluate your existing credit.

Take a look at your existing accounts. You want to make sure that your Installment Accounts (i.e., car loans, mortgage, schools loans, etc.) are paid ON TIME. Understand that the timeliness of your payments have a big impact on your credit score. Keep this in mind for your Revolving Credit Accounts as well (department store and major credit cards). Lenders want to know that they can trust you to make your payments on time. You will be judged by how you keep your word with your existing creditors. If you are in a situation where you can’t make payments on time, call your creditors in ADVANCE and try to come up with a payment plan. You’d be surprised how open Creditors are willing to work with you when you initiate with them first.

3)      CreditScore.com lists the following as the “Main Factors That Affect Your Credit Score”

  •  Your payment history. The most important factor to a potential lender is whether or not you will pay your bills in full and on time. The more recent your good (or bad) payment history, the more important it will be for your credit score.
  • Your outstanding debt. The more credit cards you have that are maxed out, the lower your score will be. As mentioned above, try to keep your credit card balances at 25 percent or less of your limits.
  • The length of time you’ve been building credit. The longer your credit history, the higher your credit rating.
  • The number of inquiries on your credit report. The more times you’ve applied for credit cards or loans, the more credit report inquiries will show up on your credit report. A higher number of credit report inquiries may indicate that you’re struggling financially or may have a lot of debt (even if you never used the cards or gotten the loans).