low credit score

How to Raise a Low Credit Score

Q: After paying off all my credit cards, I canceled all of them as well. I currently use only cash even for significant purchases. I do not know my current score but it is my understanding that it is currently very low due to my past credit history.

Should I be concerned about my credit score? If so, what should I do now that I have no credit card debt and no credit cards to speak of, to improve my credit rating?

A: There’s really no way to know what your credit standing if you haven’t seen your credit reports and credit scores recently. So you absolutely must start by getting your three credit reports from Equifax, Experian and TransUnion. You can get them free at AnnualCreditReport.com.

Next, go ahead and buy your FICO credit scores. They cost $15.95 each, and you can currently only get two of them — your Equifax based score and your TransUnion based FICO score. Get the FICO scores from MyFICO.com.

Once you see what your credit scores look like, and get a chance to review your credit reports, then you’ll know what work needs to be done. For example: Are there errors or mistakes in your credit files. You’ll want to dispute those and get them updated to show the correct information.

Do you have any past due accounts or accounts in collections? Perhaps it’s time to make a lump sum payment and negotiate to try to get those removed completely from your credit reports. But until you see EXACTLY what’s helping – or hurting – your credit, you’re essentially flying blind in terms of coming up with “how to” steps to boost your credit rating.

Even though you currently have no credit card debt, you can still improve your credit rating by a) paying all your bills on time consistently; b) only applying for credit when you really and truly need it; and c) making sure that your credit information is 100% accurate and up-to-date.  Good luck in achieving a great credit rating … I know you can do it!

Read: Should you close your credit card accounts?

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