Two weeks ago, a friend approached me about wanting to buy a home but unfortunately didn't pre-qualify for a mortgage due to a recent divorce.  So I reached out to a friend, Sean Nealon, Regional Account Manager from Continental Credit, to help her improve her credit score.  Sean recommended the following simple strategies / tips to helping clients get back on their feet from recent credit issues.  Although this is not an exhaustive list, it's definitely a start to getting your credit score back.  Want to find out more?  Call Sean at (303) 495-3244 or visit his website to find out more about full service credit correction, by clicking here.

Tip #1 – Must have a revolving account! Revolving accounts, AKA credit cards make up a significant portion of your overall credit score, 30% to be precise. If you don’t have a revolving account reporting in your name, you are automatically eliminating 30% of your total credit score. Once you open a revolving account, you will now have access to these points.

Tip #2 – Use your revolving account! In order to generate payment history on a revolving account, a minimum balance of 1% of your total credit limit must report to the credit bureaus. Recent payment history is extremely beneficial to your credit score, so make sure you are using your revolving accounts every month to accumulate payment history.

Tip #3 – Keep balances low- the lower you keep your balance on your revolving account, the more points you will earn on your credit score. A general rule is to make sure you don’t ever charge more than 30% of your credit limit, even if you plan on paying the account off in full!! The credit bureaus only receive data from your credit card companies monthly, and the data they receive is typically what shows up on your statement. If your account is maxed out on your statement, you will be penalized heavily for that account during the month.

Tip # 4 – Pay everything on time! This goes without say, being on time with payments is the most crucial thing you can do. A single 30 day late payment can drop your credit score up to 175 points, the penalty will stick around and impact your score for 7 total years!