A NUMBERS GAME
EXAMINE YOUR CREDIT REPORT FOR MISTAKES
SET SMALL GOALS
Raising a bad credit score can seem daunting, so it's best to have a battle plan with plenty of small, achievable goals. For instance, target one particularly high credit-card balance for extra payments, or aim for a six-month streak of on-time payments.
"Check your credit score quarterly. Set goals to raise your credit score 50 points at a time and to pay off your credit card monthly, and write down your goals every day," recommends Shawn Breyer of Atlanta-based Breyer Home Buyers. "Writing down your goals will keep the priority of building your credit back up at the forefront of your mind."
SEEK HELP FROM YOUR CREDITORS
GET CURRENT AND STAY CURRENT
PAY MORE THAN THE MINIMUM
Here's a common scenario: You're carrying a hefty credit-card balance, but you're only forking over the minimum payment every month. While you aren't hurting your credit score with late payments, your score is probably still taking a big hit because of high credit utilization. The credit bureaus don't want to see you carrying a balance of more than 30 percent of your credit limit on any one card, or in total across all your accounts. "If you really want to lower your score in a hurry, keep it below 10 percent," says Beverly Harzog, a consumer finance analyst and credit-card expert at U.S. News and World Report. "Your goal is to have a 10 percent ratio on each credit card, not just overall. The FICO score looks at your total ratio as well as the ratios on each individual card."