photo by CC user lendingmemo on Flickr

[Photo credit: Lending Memo]

People will jump through hoops to maintain a good credit score because everything runs on credit. Once your credit score drops, it can be difficult to bring it back up again. Fortunately, it is totally possible to raise a poor credit rating to a fair credit rating. It is also possible to turn a fair credit rating to a good credit rating. Lastly, it is possible to turn a good credit rating into an excellent credit rating. The jump from poor to excellent is just too large to manage. This is why it is important to tackle the task in steps. When you focus on improving your credit score, you simultaneously send the message to yourself that you won’t allow your credit score to define who you are and what you can do. Mistakes happen. Life happens. There are many reasons why a credit score can drop without preparation. In these cases, don’t get down and give up. Decide to cultivate an attitude of determination and tackle the challenge a bit at a time as you learn how to obtain an excellent credit score.

1) Pull your credit report

Your credit report is very important. You need to see it so you can have a good idea of what’s going on, how you’re improving, and the places that need work. Many people are afraid to look at their credit report because the numbers often depress them. Don’t do this. The sooner you decide to face the music, the better. After you’ve pulled your credit report, use this as an opportunity to decide where you’d like your credit to be within a certain amount of time. Set small, achievable goals. Once the smaller goals get crossed off, you’ll gain more confidence to keep going and pull yourself out of financial ruin. 

2) Fix any irregularities 

According to CreditSesame.com, credit bureaus make major mistakes on credit reports 80% of the time. This is a very large number. Knowing this, it is important to double-check and make sure that the debts are accurate and line up with your personal information. Call the creditors and confirm all the information listed. If you’d already paid an amount and it is still listed as outstanding on the credit report, call the company in question and request a written statement proving the debt was previously paid off. These written statements are important for clearing you and your credit. 

3) Pay off lingering debt 

Now, just because there might be an 80% chance of irregularities on the credit report, this doesn’t mean that those irregularities always happen. Most of the problems created in a person’s credit report are self-inflicted. Because of this, it is essential to get proactive about paying off lingering debt and getting back into a better financial position. Find an accountability partner to help you stay committed to getting out of debt. Get a financial mentor to help you stay inspired and motivated to continue the journey. Getting out of debt isn’t easy. However, when you decide to stick with it and pay as much off as possible, debt can be a thing of the past. 

4) Pay bills on time

One of the most damaging acts for any person to do is pay their bills late. When a person is a repeat offender of paying bills late, they send a signal to lenders that they’re not trustworthy and they lack the ability to stay true to their commitments. When a mortgage company decides to lend a person money for a home loan, one of the factors they look at is the credit score. Late payments can decrease a person’s credit score. When it comes to paying bills, do your best to pay them on time. Do it by any means necessary. 

5) Don’t become obsessive over your credit score 

During this period where you’re doing your best to get out of debt, pay your bills on time, and improve your credit score, it can be rather tempting to pull up the credit score every week or month. Ironically enough, checking the credit score often can often hurt the credit score. It sounds annoying because it is. However, it is important to follow the rules. Don’t make a habit of pulling the credit score every month. As a matter of fact, schedule credit checks, but do them in wider spans of time. You’re actually allowed to pull your credit score from the three credit bureaus (Experian, Equifax, and Transunion) for free once a year. CreditSesame.com recommends staggering the time. So, there are twelve months in one year. There are also three credit bureaus that will offer a free credit report without penalty. So, every four months, choose one of the three to pull. After April, pull a credit report from Equifax. After August, pull a credit report from Transunion and so on. This is a great way to keep tabs on what’s going on without obsessing. It’ll also be a wide enough span of time to monitor and track any marked improvements. 

There’s no doubt that these tips are much easier said than done. Credit can be a very sensitive subject for many people. However, it doesn’t have to be something that defines you. You can conquer it and enjoy an excellent credit score by following these steps with persistence and determination!