If Your Credit Score Is Under 700, Make These 3 Moves This Week
You work hard to be a responsible credit user.
You pay your bills on time; you try to use your credit card only when you have to; and you have a few different credit accounts, all in good standing. You even know what a credit utilization ratio is and why it matters. That’s some next-level credit card management!
But no matter what you do, your credit score never budges over 700. And you are so, so frustrated by the whole dang thing.
We don’t blame you. It’s hard to feel like you’re doing everything you’re supposed to, only to have an algorithm spit out a seemingly inexplicable three-digit number that brands you as “lesser than” in the eyes of the world’s financial institutions — especially when that three-digit number controls so much of your life.
But don’t give up! These three moves might be the kickstart you need to get your credit score moving in the right direction — and best of all, you can do them right this week.
1. Write a “Goodwill Letter” to Your Creditors
If your credit history is generally pretty good, save for a couple of missteps, then a well-executed goodwill letter may be one way to get those slip-ups removed from your report.
You’ll want to cover the following bases when writing your goodwill letter:
- Explain why and how long you have been a loyal customer of the creditor.
- Take responsibility for the mistakes that led to the blemishes on your credit history.
- Describe the steps you are taking to ensure they don’t happen again.
- Appeal to your audience’s sense of empathy. Show that you want forgiveness but also that you are determined to do better going forward. Show them you deserve this!
- Keep your letter concise, clear and to the point.
Don’t forget to include important information, like your account number and the date and amount of the missed payment you want removed from your credit history.
Once you’ve written your goodwill letter, address it using the information on the creditor’s website, cross your fingers for good luck, and drop it in the mailbox.
2. Check Your Credit Report for Errors
Credit reporting agencies generally do a pretty thorough job of collecting your credit history, but that doesn’t mean they are infallible. In fact, one out of five credit reports has an error, according to a study by the Federal Trade Commission.
And those errors could mean the difference between a credit score in the 600s and one in the 700s.
To keep a closer eye on your credit, get your credit score and a “credit report card” for free from Credit Sesame. It breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how to address it.
Because it simplifies everything, you should be able to spot any errors. For instance, if you find an “unpaid” credit card that you know you paid, or a bill in collections you know never existed, you can dispute the incorrect information and raise your credit score.
Jamie Cattanach saw this firsthand as a victim of identity theft. She pulled her credit report and saw her score had plummeted to just below 600 after someone opened an AT&T account using her information. She got to work disputing the errors, and after writing just one letter, she was on the road to rebuilding her credit. Within a few years, her credit score was well over 700.
The proof is in the numbers: 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.*
3. Let This Company Help You Pay Off Your Credit Cards
So now you’ve appealed to the better angels of your creditor’s nature, and you’ve gone over your credit report with a fine-tooth comb and a magnifying glass in search of errors you can dispute.
Your next step is to take your high-interest debt and consolidate it into a single loan with a lower interest rate. One payment per month is way easier to keep track of than three or four, right? That means fewer chances to be late on a payment, which means fewer opportunities for your credit score to take a hit.
And best of all: The lower interest rate means you’ll be spending less money on your debt in the long run.
That’s where a company like Fiona can be helpful. It can help you find personalized lending options to refinance or consolidate your debt to potentially save thousands of dollars in interest.
Fiona will show you all the lenders willing to help you pay off your credit card and eliminate the headache of paying bills by allowing you to make one payment each month.
If your credit score is at least 620, you can borrow up to $100,000 (no collateral needed) and compare interest rates, which start at 3.84%. The idea is to secure a loan at a lower interest rate, potentially helping you save thousands. Repayment plans range from 24 to 84 months.
Take, for example, Katherine, who faced $12,000 in credit-card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.
If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes.
So even if you’re simply curious about what’s out there, know that checking rates on Fiona won’t hurt your credit score — and can probably save you in interest.
Now you’ve got three tactics you can use to get your credit score right where you want it. Good luck — you’ve got this!