Building up your credit takes time. So, it can be painful to see your score drop dramatically after missing several payments or other issues. While we hope your score never takes a dive, there are several methods you can try to push it back up.
How Your Score is Calculated
Before we share three of the recovery methods, it’s important to understand how your score is calculated.
- Payment History = 35%
- Total Amount of Credit = 30%
- How Long You’ve Had Each Account = 15%
- Your Overall Mix of Credit Types = 10%
- All of Your New Credit = 10%
To help boost your credit, don’t miss a payment, keep your balances low, don’t close too many old accounts, and limit your overall new credit.
- Pay Off All But One Credit Account Part of your overall score is based on how much of your credit you’re using. Most experts recommend keeping utilization below 30%. That means you are using only 30% of the available credit. To boost your score, pay off as many credit card balances and lines of credit as you can. If you can drop your overall utilization below 10%, your credit score could get a significant boost.
- Dispute Errors and Omissions Give your credit a full review. To get a free copy of your report, visit AnnualCreditReport.com. Look for any accounts that should be closed, accounts with outstanding balances that you know nothing about, and anything that might be fraudulent. Then dispute those accounts with the appropriate credit bureau, which includes Experian, TransUnion, and Equifax. If the credit bureaus find your claims to be legitimate, you may see an increase in your overall credit score.
- Make Micropayments Creditors usually report to the credit bureaus once a month. By making two payments per month on each of your accounts, you could give the impression that you are in control of your overall credit, even if you need to use some of that credit for unexpected mid-month expenses.
Boost Your Financial Wellness
More Financial Wellness Matters blogs on topics ranging from financial self-care to protecting your financial health are coming soon. Twice a month, we’ll dig a bit deeper into the relationship between financial health and overall well-being, shedding light on the behaviors and beliefs that drive money relationships. With simple tips and proven insights, we hope to enhance your financial well-being and help you live a healthier, happier life.