In these recent difficult economic times, you may find it more and more problematic to pay your bills on time. As you feel your wallet weighing less, you notice your monthly credit card balance is tipping the scales (along with your anxiety over the effect on your credit scores). You are definitely not alone. In fact, it is currently estimated there are more than 43 million people in the United States who feel your pain, finding themselves with credit scores less than 620. Unfortunately, entering the FICO score danger zone (less than 620), makes it very difficult to obtain loans or receive a line of credit with reasonable interest terms.

 

Look and Learn

Before you can improve your credit scores, you need to honestly evaluate your financial situation and find out exactly where you stand.  You can obtain a free credit report once a year, but you may have to pay a nominal fee to see all three of your FICO scores.

Less is Better

Lighten-up on the plastic! You may be a fanatic about paying off your credit card every month, but if you tend to carry a big balance, you can still blemish your credit score.  Set a limit for yourself on your monthly charges that keep you within 10 to 30% of your card approved amount. For example, if you have a credit card limit of 10K a month, try to keep your purchases between one and three thousand dollars. Just this one “quick-fix” can start improving your score immediately.

Get a Loan

One of the quickest ways to credit repair is to responsibly pay off a loan. Making timely payments on a student, personal, or car loan for example, gets the most bang for your buck. Paying off a personal loan, as well as establishing excellent payment history on your credit card, makes you a responsible consumer in the eyes of the FICO score providers.

Improving your credit scores, like many goals in life, involves taking small steps in the right direction. Once you understand the lay of the land, implement one quick-fix tip at a time, and soon you will be rewarded with a feeling of accomplishment and a solid credit score.