Most consumers know the basics of improving their credit score — pay your bills on time, maintain your oldest accounts, etc. — however, experts suggest consumers think about their credit score as if it was a fingerprint, uniquely tied to their identity. It’s important to keep in mind, whether you have good credit or bad credit, that there’s always room for improvement. Here are five steps to improve your credit score to up your small business's lending quotient.
Know your credit score
Before you get into all of the logistics of repairing your credit score, you must first know what your credit score is. You can request your FICO score with all three credit bureaus at no charge, once per year at AnnualCreditReport.com, a website authorized by federal law.
Identify negative accounts & red flag information
Once you have your credit score, review all delinquent accounts and information that seem out of place. Highlight late payments and/or credit inquiries. Also, make sure all personal information associated with any account is accurate.
Payoff any unpaid credit card balances
A major impact on your FICO score is your credit utilization ratio, which is the percentage of your total available credit you actually use. It’s best to keep it below 30 percent, as anything higher can cause your credit score to drop and mortgage lenders to look elsewhere. Do your best to pay your credit card balances down to zero, or as close as possible.
Contact collections and pay for delete
Most consumers have a few delinquent accounts in collections. Review all of your collections, and figure out which ones you can pay to have deleted from your credit report. This practice is called pay for delete. However, make sure you take down your representative's information and request a written letter from the collection agency that verifies they are agreeing to remove the account from your credit report.
Dispute all negative account information
Anyone can be a victim of stolen identity. If you find anything on your credit report that looks suspicious, you should dispute any and all charges. The credit bureau has 30 days from the date they receive your dispute request to complete their investigation. Without verification from your creditor, the credit bureau will delete the disputed item.
This article was written by Marlena Turner for Small Business Pulse