By Alyssa Hurley

Are you trying to qualify for a mortgage loan? Maybe you are buying your first car? Of course, a good credit score is a crucial component of qualifying for a loan. However, if you have hit hard times, made a few financial mistakes or simply don’t have any credit history yet, there are ways to build a positive credit rating.

How do you fix your credit score? Here are six tips that may help you get back on a better credit path.

1. Request your credit report and check for errors

An excellent first step in improving a credit score is to go back to the source, which is the credit report. Try to make it a routine to check your credit report often to see if there have been any errors made. This report will show credit histories like loan balances, credit card balances, late payments, etc. When ordering a credit report, the law requires that citizens are entitled to one free report a year; after that, you can be charged prevailing fees.

Things to look for when trying to find any errors on the credit report:
• Accounts you don’t own
• Fraudulent activity
• Missing accounts
• Incorrect personal information
• Incorrect public records

2. Report any errors

The next step is to report any errors on the report. Removing errors can significantly raise a person’s credit score. Reporting a mistake can be done through mail or online and typically takes 30-45 days for a response. To better lobby for the erroneous information to be removed, ensure there is enough documentation proof so the process goes faster.
3. Pay all late fees

Once you have addressed any errors and the removal of such, it’s time to move on to other options to improve your credit. One surefire way to change your score is to pay any late fees currently affecting the low rating.

Once all late fees are paid, start paying every fee on time. Make it a habit to pay all fees on time – there are many options: automatic monthly payments, setting a reminder on the phone or simply mark due dates on your calendar.

Credit bureaus don’t consider a payment late until it is 30 days past due. A late payment can impact a score for up to seven years, so the more a person is on top of making their payments, the better the score.

4. Increase credit limits

A credit limit is put on a credit card to set a certain amount that can be spent before paying off some of the card’s balance. The limit is determined by the type of card and how good a person’s credit score is. A creditor can increase the credit limit, and if this request is granted, it could help raise a person’s credit score.

Increasing the credit limit can help because it increases the time frame to when a person needs to pay off the credit card balance, resulting in paying fees on time and improving the overall credit.

5. Open a new credit card

Last but not least is to open a new credit card because opening one helps increase the total credit score. The new credit card then lowers the credit utilization ratio, and the smaller the ratio, the better the score.

This option is the trickiest and requires a lot of responsibility. First, you must be willing to pay all fees on time because if a payment is missed, that lowers the score, which is the opposite of what you are trying to do. Second, try not to open too many because credit history is measured by age, so the longer the account is open, the better.

Finally, don’t get in credit card trouble! Budgeting responsibly is a must for achieving great personal credit.

If you are looking at buying a home and need more advice on whether you qualify, contact TrustPoint Insurance & Real Estate. While our team cannot directly run your credit score or verify if you are qualified to purchase a home, we will work with knowledgeable mortgage lenders to put you in the right direction.