The Cliff Notes to Improving Your Credit Scores

Credit scores should be viewed as a person’s financial report cards. Each credit score given by each credit bureau is simply an assessment of your financial ranking as a consumer. Credit scores are important because these numbers determine how much interest you will pay when obtaining credit cards and installment loans. Credit scores are also used by insurance companies to determine eligibility and rates, and by potential employers.  Here’s how to fix your score in four steps that take less than a day.

1). Find out what your score is or could be. To find out what your credit scores are, you can sign up for free trial at But you would have to remember to cancel your membership before the promotional period is over. Another option is estimating your credit score with FICO calculator at I have used this numerous times, and found it to be within a 10-point range of my actual credit score. Both methods should require no more than 15 minutes of your time.   You cannot improve your credit score if you do not know what is on your credit reports.

2). Review your credit report. The next step in improving your credit score is getting a free credit report from each of the 3 credit bureaus. This can be accomplished by visiting Consumers are allowed 1 free credit report from each bureau, each year by law.  Each credit report should be reviewed for and negative incorrect information. If any information is incorrect, you should contact bureau(s) right away to update the information and request that it changes are made immediately. Reviewing your credit reports may vary time due to each person’s financial history. I would suggest spending at least 20 minutes looking at each credit report.

3). Create a plan, and work that plan. The final step to improving your credit score is creating a budget plan that will either pay down or pay off your debts within 90 days to 6 months. It typically takes 30 days for a credit bureau to update balances. If you have substantial debt (over $30,000), create plan that you can accomplish in 18 months to 3 years. Allocate about 1 hour to creating your budget plan.

4). Don’t believe the hype. The most common misunderstanding about credit is that a zero credit score is a negative thing. Having a credit score of 0 means simply that you don’t have debt with a financial institution. In situations where major lending may be required, your financial habits can be verified through alternative sources of credit. Alternative sources typically include utility payments, cell phone accounts, rental history, and medical bills. Another common misunderstanding is making regular and timely payments on your accounts will automatically improve your scores. The reality is that paying your balances in full each month will increase your credit score. If you are just making the minimum payments on your accounts, do not expect a credit score anywhere near 750.