Before we discuss how to “improve credit scores,” let’s get the technicalities out of the way. Maxine Sweet, vice president of public education for Experian, explains that “we cannot ‘technically’ improve Credit Scores.” The Credit Score is calculated based on the content that is in the credit report. So, in order to change the credit score number, the information in the report must be changed, which will then change the score. For example, in order to get a better grade on a test, we must have more correct answers, which will improve the grade. Our credit score is our financial grade.

The reality is lots of people, including myself, have made major money mistakes that may have negatively affected our credit. Many consumers need or want to improve their credit, but have no idea where to begin. So, before you think about paying a credit repair company hundreds of dollars to fix your credit, here are 5 Easy Ways to Improve Your Credit Score yourself.

Pay Bills On Time

Although it may seem like an elementary statement, many people do not understand the importance and impact on the credit score of paying accounts on time every month. Payment history affects 35% of the credit score. Making payments on time every month will help to improve your credit and, therefore, have a positive effect on the credit score.

Pay Down Credit Card Balances

Another way to have a positive effect on the credit score is to pay down the balance on revolving accounts. The balance we hold on revolving accounts, such as lines of credit and credit cards (called “utilization”), affects 30% of the credit score. The balance amount that we should maintain on revolving accounts is debatable. Some say keep balances below 30% to 50% of the credit limit. However, the lower the balance on these types of accounts, the better. The best rule of thumb is “if you can’t afford to pay off the balance within one to three months, rethink the transaction,” especially if you are trying to increase the credit score.

Keep Revolving Accounts Open

Once you have paid off the credit card, keep the account open for as long as possible. Keeping these accounts open with a zero balance will have a positive effect of 45% of the credit score; 30% for utilization and 15% for age of accounts. The older an account is, the better. Some credit card companies or financial institutions may close an account based on past payment history, current credit rating or inactivity. So, make sure you check the status of the account to make sure it is open. Also, avoid re-using the credit once you have successfully paid it off until you have reached your ultimate financial and credit goals.

Make Payment Agreements on Current Accounts

If you are currently late on credit accounts, contact your creditor to explain your financial situation and establish a payment arrangement. Some creditors are able and may be willing to modify or refinance a credit account for customers dealing with or resurrecting from financial hardships. Ask your creditor what payment arrangement options are available to help you get back on track.

Pay off Bad Debt

The best way to clear up bad credit accounts is to pay off the smallest balance and work your way up to the largest balance. Pay off what you can afford. Regardless of the amount of the bad debt, they all have the same effect on credit and credit scores. So, if it’s $50 or $5000, it will have the same negative impact. However, before you pay off or make payment arrangements to pay off bad debt, make sure you NEGOTIATE. Some creditors and collection agencies may be willing to accept a payment as low as 25% of the reported balance as a settlement. Make sure you get everything in writing before you make the payment. has great DIY (Do It Yourself) Credit Repair Tips and sample dispute and settlement letters you can use. Only contact the organization and negotiate when you have the cash available to pay off the debt(s).

Don’t forget to get free copies of your credit reports from All three of the major credit reporting agencies (Equifax, Experian and TransUnion) have instructions on how to read their report formats, as well as instruction on how to dispute inaccurate information. Keep in mind, whatever a credit repair company can do, you can do the same for free. Should you decide to seek assistance from a credit restoration company, do your research before making any commitments.

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