1) Know Your Current Credit Score

Without knowing your precise starting point youll find it hard to know exactly how much youll need to improve your score. Order a copy of your credit report from one of the three major credit bureaus and find out your exact starting score. You might even find that your score is higher than you thought.

2) Repair Credit Errors

Did you know you can legally dispute any wrongful errors listed on your credit report - and youre allowed to dispute these yourself. You dont need to pay expensive fees for credit repair companies to remove these for you.

Search the internet for “credit repair letter templates” and then write to the credit bureaus yourself.

3) Negotiate

If youre all ready behind on any payments or bills, then dont be afraid to call your lender or credit company. Ask them if you can negotiate for extended payment dates and discuss ways to reduce your payment costs by either finding about about lower interest options or refinancing and consolidating to help make meeting payments easier.

4) No More Credit

If youre trying to improve your credit score then dont apply for any more credit and dont keep using the credit cards you already have.

If you can show a positive reduction on your existing balances - even if its only a few dollars a week - then your score will gradually increase as your total debt to credit ratio will begin to improve.

No more credit!

5) Pay Off Outstanding Debts

Youll be surprised how willing most credit companies and banks can be when you call and discuss positive options. They do understand that everyone has moments where we all fall behind and they will be happy that you””””re trying to catch up.

6) Arrange Payment Plans

There is absolutely no point in offering to pay off your past debts at $1,000 a week if you know you cant keep up those payments. Make sure you arrange for realistic payment plans that fit into your budget are will be manageable to keep up with.

7) Create New Spending Habits

If youre looking for ways to repair bad credit then obviously repeating your spending habits from the past are only going to get you into deeper financial trouble.

Learn to allocate the money you receive from your pay check each week a little differently. Prioritize your repayments and your bills and make sure youre keeping up with the important things. The longer you keep up a great repayment history, the higher your credit score will be bumped up over time.

Professional Assistance

If youve reached the point where your credit is already too bad to consider simple credit repair tactics, then maybe its time to seek professional help.

Professional credit counselors and debt management companies can help you to work around your existing issues and get you back on track.

Never be ashamed to ask for help. Listen to what advice the professionals can offer and make sure you act on that advice.

If you’re trying to improve your credit score, then you’ll benefit from knowing a little about how it’s calculated.

The number you see as your credit score is a figure calculated using various factors by the three big Credit Reporting Bureaus. The factors they use for this calculation come from any reports they receive from your creditors about your past credit history and behavior.

Let’s think for a moment about your current debts. You could have any combination of credit cards, store cards, personal loans, mortgages, student loans and others. Each time you make a payment - or miss a payment - on your loans, it will be reported to the Credit Reporting Bureaus.

Americans have an average credit score of 693. When banks look at credit applications, they will consider this average score to be generally acceptable to their policies, although they realize there is room for improvement.

Banks will consider any customers with a credit score higher than 700 to be good and if you can get your credit score as high as 750, banks will see this as exceptionally good. Customers with good credit scores are offered the better interest rates and are rewarded for having great credit histories.

But clients with low credit scores, which is any score below 675, are considered to be risky customers. Banks don’t make as much profit from customers who don’t pay their bills. So they label them ’sub-prime’ borrowers and they charge higher than normal interest rates to counteract the bank’s potential risk for taking on risky clients. Unfortunately this increases your repayments each month too.

If your credit score drops even lower to below 600, you may only be able to borrow funds with great difficulty.

Before you begin looking at ways to improve your credit score, it’s important to understand a bit about how your score is calculated and why certain behaviors and actions will either increase or decrease your score.

Let’s look at how your credit score is calculated.

35% of your credit score comes from your credit history

By making sure all your repayments and bills are paid on time each month, then this part of your score is the easiest to improve, but it’s also the quickest to destroy if you start falling behind. For a quick boost to your credit score, try making smaller, more regular payments on your bills and outstanding debts. Instead of paying monthly, break down your payments to bi-weekly or even weekly and this section of your score will begin to improve.

30% of your credit score comes from your account balances

The Credit Reporting Bureaus add up the total of your available credit limits and then consider the ratio of how high your current balances might be. For example, several maxxed out credit cards all at or near their top limit will give you a high ratio and reduce your score. This also means that several credit cards with very low balances but plenty of unused credit limit is a low ratio, which increases your score.

15% of your credit score comes from your length of time with credit

If you’ve been faithfully paying off your mortgage for some years now, then this has a big benefit in this section of your credit scoring calculations. The banks can easily see that you have discipline and you’re usually very responsible with your money.

But if you’ve gone on a credit binge in the last year and have several credit cards all with high balances near their limits, then banks consider that you’re not very good with handling your financial resposibilities.

10% of your credit score comes from your types of credit

Credit reporting bureaus know that almost all families have a healthy mix of a mortgage, perhaps a car loan and a credit card as part of everyday financial use and will give a good score for this section.

But people with several credit cards, store cards, personal loans or other outstanding debts are showing that they aren’t able to manage their lifestyles on the incomes they receive. This amount of excessive consumer debt can often be a sign of financial irresponsibility and your score will be reduced as a result.

10% of your credit score comes from credit inquiries you’ve made

Each time you apply for credit, it’s reported to the Credit Reporting Bureaus. Your credit enquiries are listed on your report for up to 5 years. If you have a rush of applications in the past 6 months for credit cards or personal loans then the bank might consider that you’re either on a credit binge or that you’re having financial difficulties in other areas.

For anyone who already has a low credit score, then you should already know that banks will happily charge you penalty rates and much higher interest rates on your credit and loans. If your score has dropped too low then you might not be able to get approved for a new loan at all.

Raising your credit score becomes not only a great way to become eligible for lower interest rates, but it could also mean breathing easier with your repayments each month.

Anyone can increase credit score easily. It just takes a little planning and some discipline. You won’t even need to pay ridiculously high fees to some credit repair company when you do it yourself.

Here are some simple steps that will help improve your credit score.

1. Remove negative listings

Some lending companies or banks may neglect to remove negative listings once you’ve made your payments or they forget to report them once you’ve cleared up any disputes you might have had. You are legally allowed to write to the 3 major credit reporting bureaus on your own regarding these listings.

Your letter should request an investigation into any negative listings. Once they receive your letter they have 30 days to look into your inquiry. If they can’t verify any listing on your credit report, then they’ll have to remove it.

2. Payment Timing Counts

Did you know that your bank or credit card company only reports on your repayment conduct monthly? Most people make their bill repayments once a month whenever the bill or statement arrives too.

Did you also know that you are allowed to make your payments on your bills, loans, mortgages and credit cards every time you get paid?

Work out how much your monthly payment amount is and then pay one quarter of this amount each week instead. You’re not paying more money - you’re just paying it more often. This extra repayment activity is reported by the banks positively and helps to increase your score.

3. Catch Up Any OverDue Payments

This is the quickest possible repair solution for anyone with bad credit. Catch up any overdue payments you have with all your creditors. If you don’t have the cash to pay everything off right away, call and negotiate a realistic payment plan that will help you catch up.

When you’ve caught up all your payments, call them and ask if they’ll report to the credit reporting bureaus that all payments have been met.

4. Low Balances, High Limits

If you’ve been diligent about paying off your debts, then hopefully you should have a low balance compared to your available limit.

However if you’re maxxed out and already at your credit limit, it is possible to open new credit accounts with high limits but make sure you keep the balance really low. When your credit score is being calculated, they consider low balances with high available credit shows positive discipline and they’ll increase your score because of it.

Please don’t use this option if you’re the type of person who will simply be tempted to spend all the available credit or you’ll only make your credit score even worse.