Five Steps to Improve Your Credit Score

Koontz & Associates, PL can assist you with professional help to improve your credit.  We have recommendations on how to get out of credit card debt.  We offer credit card debt relief assistance to get you back on track.  With our debt solutions, we can get you on the road to credit recovery to help alleviate the burden of financial stress.    Here are five ways you can get started.  Call us for a personalized consultation on debt settlement for your specific needs.

1.  Pay Down Your Credit Card Balances.

High debt is one of the primary catalysts of a low credit score. Carrying too much debt can hinder your credit utilization ratio, or the amount you owe vs. your total credit limit. Initiate instant results by paying down balances and keeping your ratio below 25 percent.

2.  Increase Your Limits.

Credit repair requires skill. If paying off debt isn’t an option, use a different strategy to lower your credit utilization ratio. Asking your credit card issuers to increase your credit limits may lessen the burden. For example, Mara owes $3,000 on a card with a $9,000 limit. She calls her creditor and requests a limit increase to $11,000. This simple act lowers her utilization ratio from 33 to 27 percent without costing her a penny. There is a Catch 22, though: If your credit history is really poor, then you’ll likely have to delay your request until you’ve got at least a few months of real credit repair under your financial belt.

3.  Cash in on History.

The length of your credit history in years accounts for 15 percent of your credit score, so why not cash in on that history? Dust off your oldest account and use it a bit before your creditor decides to close it due to long-term inactivity. This actually happens, by the way, especially during tough economic times when creditors seek to rid their portfolios of unprofitable customers.

4.  Confront Unfair Credit Reporting.

Fortunately for you, credit reporting must be fair, relevant, substantiated, and accurate. So don’t pay for a credit company’s mistakes without realizing it. Keep the playing field level by ordering a free copy of your credit report. Look for questionable information related to:

  • Unverifiable late payments, charge-offs, or collections
  • Paid accounts that are falsely cited as “settled,” “paid derogatory,” or “paid charge-off”
  • Accounts that are not yours Credit limits listed as less than they actually are
  • Accounts listed as “unpaid” even if they were charged off in bankruptcy
  • Older, negative items that should have fallen off your credit report (e.g., items older than 7 years; 10 years in the case of some bankruptcies)

5.  Stop the Inquiries.

Legally, creditors need permission to access your personal credit information, and a credit report “inquiry” provides a record of such access. In reality, credit companies often don’t follow the rules to the letter when violating your privacy in this way. Even worse, even the presence of a few inquiries can depress your credit scores. Review the inquiries on your credit report to verify that your permission was obtained in advance. If you see something you don’t recognize, contact the credit bureaus to remove the offending marks.

Remember to Consider the Tax Implications

As with any short sale or debt settlement, potential tax consequences must be considered. If a lender chooses to release a borrower from some, or all, of an outstanding loan obligation, it is required to issue a Form 1099-C which reports the cancellation of debt. Not only does the lender have a reporting obligation, but the borrower must also report this liability on their tax return for that year.

Good Credit should be a Lifelong Goal

Credit repair is a lifelong goal, and you have the power to make positive and fast changes today. If your credit reports need significant attention, consider hiring professional help. No matter how you decide to proceed, take the time to improve your credit score now because the results may afford a lasting financial impact.

Koontz & Associates, PL can assist you with further professional help to improve your credit.  We have helped many clients with the negotiation of debt settlement with credit card companies and mortgage lenders.  We have recommendations on how to get out of credit card debt.  We offer credit card debt relief assistance to get you back on track.  With our debt solutions, we can get you on the road to credit recovery to help alleviate the burden of financial stress.    Call us today for a personalized consultation on debt settlement for your specific needs.

Jo Ann Koontz

joann@koontzassociates.com 941-225-2615