Over the past few years, lending skyrocketed and individuals with low credit scores were able to obtain loans. Times are changing, though. Lenders are once again putting high scores at a premium, which means if you have a low score, you may miss out on a chance to borrow at lower rates. That begs the question – How can you raise your score?

“Hits” on your credit history lower your score but don’t stay on your report forever. They can, however, take some time to remove. In general, it can take seven years for negative information to come off your credit report. Chapter 7 bankruptcies take even longer - 10 years. Unpaid lawsuits or judgments remain on your credit report until the statute of limitations expires or seven years, whichever is longer. More information about credit report hits can be found at Experian.

Steps to Improve Your Score
Your credit score is a snapshot of where you are today and repairing your score takes time. But, there are steps you can take now to start your road to recovery:

Credit Cards and Payments

• Charge only what you need. If you have a debit card, think about using it to make smaller purchases.
• Pay down your monthly balances and try not to use all of your available credit. Higher balances can lower your score.
• Pay your bills on time. If you can’t afford to pay a bill in full, at least make the minimum payment. Minimum payments that are past due show up on your report.
• Avoid applying for new credit sources. Whether you’re approved or denied, new credit applications can hurt your score.

Overcoming Hardships

• If you’ve lost income or if you’ve lost your job, contact your creditors to adjust your payments.
• Can you explain your credit report hits? If so, you can include a 100-word explanation describing any extraordinary circumstances that caused the hit(s) on your report, such as job loss or an illness. Doing so won’t improve your credit score, but it allows you to tell future creditors your side of the story.
• Credit counseling may be an option but, before undertaking the process, do your research and gather information to determine if it is right for you. Scammers take advantage of people in need.

Additional Steps

• Dispute errors on your credit report - they can have a huge impact on your score.
• Avoid closing accounts in good standing. Credit scores look at your history and the longer you’ve had an account open that has little to no negative history , the better off you’ll be.
• Educate yourself about the credit scoring models used by lenders. Most lenders use FICO scores while others are moving to a new model called VantageScore.
• Don’t just tear up your personal information - invest in a paper shredder or contact your local Department of Public Works to see if they offer free shredding. Identity theft is costly!
• If you receive a lot of pre-approved credit card offers in the mail, you can call (888) 5-OPTOUT or (888) 567-8688 to opt out or go online to www.optoutprescreen.com. Doing so not only prevents your score from dropping but, it also reduces your junk mail.

When it comes to your credit, it’s never too late to start making changes. To see what’s on your credit report now, visit Annual Credit Report.