Your Credit Score – There is No Immediate Fix
August 5, 2013
Despite what you may see advertised in your mailbox, on television, on the radio, and across the internet, there is no way to quickly fix a poor credit score. It is kind of like getting in shape. There are plenty of programs promising instant results, but the only real solution is consistent effort and discipline.
Many of these credit repair companies are simply looking to collect your money, money that could be going to pay off your creditors, in exchange for bold promises they will never be able to live up to. Can they stop harassing phone calls from your creditors? Sometimes. However, so can you by calling to negotiate with your creditors yourself.
So what kind of things can actually improve your credit score? There are a few things you can be doing, but you will quickly see why these things are not going to have an immediate impact on your credit score.
One of the bigger factors in determining your credit score is looking at the ratio of your current balances compared to your total available credit. The closer you are to maxing out your total credit, the worse it is going to be for your score. The only solution to this one is to pay down what you can as fast as you can. If you have a lot of high balances, short of a sizeable inheritance falling in your lap, most likely you are not going to be able to fix this one quickly.
The other really significant factor in your credit score is your payment history. If you have had delinquent payments in the past, they are going to stay on your credit report for 7 years. The more recent payment history is weighted heavier, so a late payment 6 years ago won’t kill your score. It’s not helping it though either.
If you have had trouble paying your bills on time, all of a sudden paying everything on time is not going to magically fix your credit overnight. You need to develop a track record of paying on time over and over again.
If you find yourself unable to pay a creditor on time, reach out to them immediately and explain the situation. Many times they will allow you to miss a payment without reporting it as late (you will still accumulate interest) if you contact them first, or sometimes they will accept a smaller payment and credit you with paying on time. Either solution is better than another late payment reflected on your credit report.
Lastly, try to limit inquiries on your credit report. Each time someone pulls your credit report your score drops a few point. Inquiries remain on your credit report for 2 years. There are a few exceptions for what are known as like inquiries. An example of a like inquiry would be if you decided you were going to refinance your mortgage. You could apply with 3 different mortgage companies and allow each one to pull your credit. That would only count as one inquiry on your credit report. This provision was added to how credit inquiries are handled to allow consumers to shop around for the best deal and not feel tied in to the first lender that pulls their credit report.
Ignore the hype of companies and organizations promising to fix your credit overnight. Start taking your credit score into your own hands. It takes time, so start immediately.