Finding your way out of a bad credit score

The fastest and easiest way to a perfect credit score is to pay your bills every month on or before the scheduled due date. But even the most reliable bill payers can catch themselves in an occasional slip up.

Take me for example, I recently found myself in a situation where my “Very Good” credit score could’ve been ruined for quite a long time - even years - just from one troubling event. The issue occurred when I assumed that a closed cellular phone account was actually paid in full and actually closed! I never followed up and because of that, found myself being contacted months later by a collection agency for a grand total of $69.76! That’s a small price to pay to potentially ruin credit history, and mine took a huge hit from this situation. After I discovered that it was reported to the credit bureaus, I contacted the collection agency. Eventually (30 to 60 days later), the agency advised the credit bureau to take it off and the issue was finally resolved.

Some ways of staying on top of the credit score game:

The easiest and quickest way to review your credit history is to visit http://www.myfico.com/. For a small fee, you’ll be able to set up an account, get a detailed look at your accounts and credit scores from all three credit bureaus – TransUnion, Experian, and Equifax. Once reviewed, you’re then able to dispute any items that you feel were reported by mistake. The information is accessible for a little over one month – allowing some flexibility in monitoring your scores and fixing any reporting errors.

Keep your debt to income ratio within reason. For example, having a yearly salary of $30,000 and $100,000 in debt – could be a potential danger zone! If you have one too many credit cards, buckle down and pay some of those off. Once the accounts are paid off, leave the accounts open, rather than paying them off immediately. The zero balances are actually better than closed accounts, but be sure to cut them up or keep them out of your sight. That way, you won’t be tempted to use one of them when you see a shirt that you just have to buy.
Also, I’d like to point out that retail or department store cards are useless when it comes to building credit. These types of cards also usually involve ridiculously high interest rates. So, try to stay away from those if possible.

Finally, when you do close accounts, be sure to get a letter mailed to you stating that the account was paid in full and the account was closed at consumer’s request. If you move, have your address changed with all lenders to ensure prompt statements and avoid any bill payment confusion.