With Halloween fully upon us (tomorrow, that is), we’re in the thick of the spookiest season of the year…chilly clouds of autumn mist snake their way across barren fields and lakes, making even the brightest of mornings seem strangely sinister; dead leaves hurl themselves from skeletal trees, and night falls faster and faster with each passing day. As the zombies of the world shake off their moldering rags and prepare for their midnight rise from the dead, grab your pumpkin pails of candy and gather around the KLS campfire as we discuss how you too can rise…from the red.
All holiday jokes aside, raising your credit score can be a very scary process if you don’t know where to start. As mentioned in my last post, your credit score provides lenders with a numerical representation of how likely you are to pay them back for loans – so the higher your score, the more likely you are to qualify for a great credit card, land your dream home, and even improve your chances of getting hired. Unfortunately, there’s no quick fix to rebuilding credit – it doesn’t take much time at all to ruin your credit score, but it can take years to fully repair the damage. Additionally, while every individual’s credit score is unique and may be impacted differently by comparable actions, there are a few reliable ways to rescue your score from the credit graveyard!
- Obtain a copy of your credit report. You can pull your free yearly report from each of the three credit bureaus (Experian, Equifax, and TransUnion) at www.annualcreditreport.com. You may choose to receive all three at once, or space them out over the course of 12 months. Even if you always pay your bills on time and keep your spending to a minimum, don’t pass up the chance to check your score for free! Everyone misses a payment at some point, and you may be surprised to see the lingering ghosts of bills past (okay, at this point I’m just taking every possible opportunity to throw in a corny Halloween line). Once you have a copy of your credit report, you can begin to identify and deal with any negative accounts.
- Work on paying off your debts and reduce credit card balances. You had to know this advice was coming from the employee of a collection agency, but before you grab your pitchforks, hear me out – your credit score is heavily impacted by something known as the credit utilization ratio. Essentially, you can arrive at this number by taking the sum of your credit card balances and dividing that figure by your credit limit. Most lenders prefer a utilization ratio of 30% or lower – you might find yourself getting goosebumps when you realize how high this number could climb if you don’t use your credit responsibly!
- Try your hardest to pay your bills on time. It seems criminally obvious, but late payments can and will wreak havoc on your credit score. Whenever your lenders review your credit report, they are unquestionably looking for consistency and accountability – if you fall into the habit of making late payments, your score can drop and you may be denied for future loans.
- Contact KLS! We’ve mentioned before that KLS deals with paid accounts in a uniquely consumer friendly manner. In keeping with the mysterious atmosphere of the season, I won’t divulge too many details within this post….but if you happen to have an account with our office, we absolutely want you to reach out. Seeing as we’re not vampires, we don’t bite!
A good credit score will help you in all walks of life, from the cradle (wait for it)….to the grave! Maintaining your score is the best indicator to lenders that you will continue to carry out responsible financial practices in the future. Keep monitoring your credit, begin to square away old debts, and be patient – a perfect score won’t ever develop overnight. And from all of us at KLS, have a safe and happy Halloween! Now…where did I put that broomstick?