debt

3 steps to improve your credit score today

Rebuilding bad credit can take years, but that doesn't mean you can't take steps today that will improve your credit score now. Here are some ways to help improve your score:

Correct errors. There are plenty of reasons that your credit report isn't accurate. Perhaps your identity was stolen, or you paid off a debt but the creditor never reported it.

If it's wrong, there's a problem, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling in Silver Spring, Md. "Make sure that everything in that report is right because your credit score is based on that report," she says.

To correct an error, submit details of the error in writing, including corresponding documents, to the credit bureau that's recorded the error. It has 30 days to investigate and make a determination about its accuracy, the Federal Trade Commission says. If a mistake gets scrubbed from your credit report, you could see your score jump by 50 to 100 points.

Pay down your balances. Thirty percent of your credit score is based on your credit utilization ratio -- the amount of credit you've used compared to your limit. If that ratio is higher than 30 percent, it's going to have a negative impact on your credit score. Put a big chunk of cash from a savings account or tax refund toward your debt to lower that ratio and boost your credit score.

Start automating payments. Improving your credit starts with paying your debt on time. If late or missed payments have led to bad credit, it's easy to make sure your bills are paid automatically and on time. Set up electronic payments to pay off credit cards, mortgages and other debt. This will ensure you never miss a payment and improve your credit score.

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