Military Finance Report: 5 Tips to Increase Your Credit Score

Thursday, June 27, 2013

5 Tips to Increase Your Credit Score

Here are 5 tips to increase your credit score.  Some people get a pay raise, a new job or get some extra cash and want to know how to increase their credit score.  These tips should help and I'll post more about each one in detail later.  Increasing your credit score could save you hundreds, thousands or hundreds of thousands of dollars in your future.  A small investment of time and money now may pay off big time both financially and emotionally.

  1. Keep good standing with all current debts - You can't change the past.  If you are struggling to make ends meet, then you should stick with this step until you have some extra money to tackle previous debts or trying to increase your credit score.  Your credit score weighs the most recent activity higher, so keeping good standing with current debts will maintain or increase your score more than going into past credit troubles.
  2. Make sure your credit reports are accurate - There are a number of reasons why there maybe something incorrect on your credit report.  Go to www.annualcreditreport.com and get your free credit reports and make sure everything is accurate.  If something is wrong, the credit bureau should have a phone number to challenge an item.  I'll tell you upfront that it's not easy to change something and the burden is on the member, not the company who did something wrong or a person that may have used your identity.
  3. Pay off any outstanding prior debts - Now that you have your free credit reports, you can try and pay off anything you may have in collections.  Call only one agency at a time because collection agencies are aggressive.  If you have a lump sum, then great, pay it in full.  If you want to make payments, then call the collection agency and be firm.  Use ultimatums like, "Take this payment plan or else I'm walking away."  They may threaten to garnish your wages, but they won't because you calling them to make payments debunks any legal case against you.  Also, try the old "Let me talk to your supervisor" line to make payments.  Go in order of smallest balances so you can get it off your record sooner.
  4. Maximize your score - If you have nothing in collections, your credit reports are all accurate and you are current on everything, then it's time to maximize your credit score.  Credit scores are made from "corrupt" math that us humans have decided to make to oppress other humans.  Sorry, that's a little of my own ideologies coming out.  But really, it helps to get help from the source with credit scores.  I recommend going to www.myfico.com and paying $14.95 for their credit report & score.  At the end of the report, there are summaries, tips, recommendations and simulators that you can use to maximize your credit score.
  5. Get professional help - Sometimes getting professional help is the best way to increase your credit score.  For military members, USAA offers great free financial advice. Most Airman Family Readiness Centers (or whatever other non-Air Force services call it) have trained or certified financial planners that give free financial advice.  Other civilian-based companies may charge for an hour or two of time.  Either way, sometimes professional help is a great investment.

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