Though it’s extremely important to our finances, many Americans have no idea what their credit score is, either because they haven’t needed to or, more likely, because they’re nervous to see the damage. But not knowing can’t save you when you try to take out a small business loan, only to get denied because your credit score is too low. The best course of action is to face the music – and then take steps toward making it right.
Once you’ve finally pulled a credit report (the Federal Trade Commission can help you find a reputable free credit score agency), it’s time to face the numbers and make some changes. And with just a few phone calls, you can not only raise your credit, you can improve your chances of getting credit-based approval in the future, whether it be a mortgage on a new home, a lease on an office space, or even funding for a small business.
Financial advisor Galia Gichon works specifically with small business owners and freelancers. Here’s her advice for how to raise your credit score without paying an arm and a leg, or even leaving your couch.
Check for mistakes. “I’ve noticed…50% of credit reports have mistakes on them,” says Galia. “You thought you paid a bill off but, in actuality, it says that you didn’t.” If you did pay the bill, be sure to get that corrected, either through the credit report or through the original agency. You can also fix mistakes that you, yourself made – often, says Galia, credit card companies will make a note if you’ve paid a bill late. Call them up and ask them to take that off.
“You’re at ‘no’ now,” she advises, noting that you might as well take a stab and see if they’ve do it. It can make a huge difference and, she says “the times I’ve called, they’ve taken it off.”
Correct wrong charges. “If there’s a wrong item, you’ve got to dispute it,” says Galia. There’s no point in paying for something you truly don’t owe. Credit reports and credit companies make mistakes like everyone else.
Pay off small debts. Of course, if you do owe money, disputing it might not be the best course of action. Whether you disagree with a fee from your dentist or you’re sure you were overcharged for some other service, don’t let pride be the reason your credit score is lower than you’d like. If it’s really not much money, it might be easier to just make it go away.
“Just pay the bill,” says Galia. “If it’s a small fee, it can really turn into a much bigger deal. It can keep you from getting a mortgage. If it’s something small, just pay it off.”
Stop applying for new cards. Instead of adding more cards to your credit debt, ask for a raise of your current credit limit.
Whatever you do, don’t put off your fight to raise your credit score. Mistakes take six months to fix, says Galia – so start now.