Your Credit Report is the Key to Your Future (cont.)
Contributed by Andrea P
Even if your FICO score is low, there are certain things that you can do to improve your credit report. For example, keeping your credit card balance to about 25% of your total spending limit can improve your score somewhat. Keeping the total amount of credit card accounts open to a minimum can also bolster your credit. Above all, pay bills on time. If your credit is shaky and you have a past history of defaulting on payments, you can elect to open one or two pre-approved accounts. Then, pay these accounts off quickly to demonstrate that you can use a credit card responsibly.
It is also important to note that consolidating credit card balances to lower interest cards can negatively affect your credit report. For example, let's say that you have two cards. One has a $5,000 limit and the other has a $10,000 limit. Let's say you move a two thousand dollar balance from the lower limit card to the higher limit card because it has a significantly lower APR. This leaves you with a $9500 balance altogether. Since you have almost maxed out your higher limit card, this can have negative consequences for your credit report.
There are many things that you can do yourself to repair your credit. However, be aware that it may take 6-12 months for "good behavior" to counterbalance past credit mistakes. If you feel that need for additional guidance in modifying your credit report, there are numerous not-for-profit agencies that can assist you in creating a long term plan for repairing your credit history.
