So you’ve have a few problems paying your bills on time, and you’re wondering what you can do to repair the damage. Here are some tips from shine.com to help get your credit score back on track:
1) Pay on time. Prioritize the payment of bills that show up on your credit report and set up an organized bill-paying system so that you won’t miss a payment. Paying on time accounts for 35% of your credit score, so this is one of the easiest ways to improve it.
2) Pay more than the minimum. The minimum required monthly payment isn’t there to do you any favors – it’s there to keep you in debt. Pay as much toward your credit card balance as you can each month, and pay down the cards with the highest interest rates first. Lower balances are better for your credit score.
3) Prioritize your biggest debts. Focus on paying down credit card balances that are higher than 50% of your credit limit. The amounts you owe make up 30% of your credit score, and borrowers who have used up more of their available credit are considered higher risk.
4) Negotiate a lower interest rate. With a lower interest rate, your pile of existing credit card debt won’t grow as much every month, and you’ll be able to pay down your balances faster.
5) Keep your oldest accounts open. The length of your credit history is 15% of your score, so even after you’ve paid down your balances, keep your oldest cards open. If you don’t have a balance, use these cards to make occasional purchases (then pay the bills in full), so the card company won’t close your account for inactivity.