KeyPoint Credit Union Blog


From CEO, Brad Canfield

Here’s How to Improve a Sinking Credit Score

We’ve probably all been there before. You’re late paying a bill and your creditor tacks on a fee. As annoying as it is to pay extra fees, you’re also paying extra because your credit score is diminished by late payments. In the long run, a lower credit score can mean paying higher interest rates on loans and that costs you more money.
And if you’re a software engineer who’s new to Silicon Valley and the country, moving your family half-way across the world might mean that some of your payment obligations slipped through the cracks. When you’re researching opportunity to purchase Silicon Valley real estate, you don’t want your credit score to hamper your ability to get a good deal.
So what type of credit score needs to be repaired? If your FICO score is below 620, it’s difficult to get credit cards and loans with reasonable rates, says Liz Weston at MSN Money. And if your score is below 760, that means you have room for improvement. But keep in mind that repairing your credit takes time. If you hear advertisements on TV and radio about companies promising to immediately erase your bad credit, beware a scam in the works, according to attorneys at the Federal Trade Commission.

Scour Your Credit Report for Incorrect Information

After you find out your credit score, get a copy of your credit report and make sure that all of the information is correct. Even seemingly minor mistakes, such as your name being misspelled, can affect your credit score. You cannot erase legitimate bad marks in your payment history, but if you find mistakes and wrong information, you have every right to contact the creditor to resolve the issue. The Federal Trade Commission offers a helpful credit repair guide, which includes a sample letter for disputing information in your file.

Take a Disciplined Approach to Debt Management

Once you’ve reconciled your credit report, you’ll need to invest time and discipline into repairing your credit. If you’re a serial late payer, set up payment reminders so that you don’t miss any more due dates on your bills. The key to repairing your credit is to steadily pay down your debt on credit cards and loans. Reducing your debt through timely payments is a key factor in improving your credit score. Responsibly managing credit doesn’t mean asking creditors to lower your credit availability, though; in fact, that can lower your credit score because it will reduce the margin between your debt and your debt ceiling. If you have more padding between those two elements, your credit score will benefit. FICO provides additional tips to repair credit and improve your FICO credit score.

A message to all software engineers here in Silicon Valley and fellow residents, you can take control of your credit score by researching your file and disputing incorrect information. After that, a steady approach to managing your credit and debt load is required. And KeyPoint provides credit cards and loan products that can help you improve your credit score. Contact us today to learn more.


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