Lower credit utilization ratios Reduce "proportion of balance to limit" on credit cards and home equity line of credits (HELOC) to 25% or less individually and in the aggregate. There two ways to do this. •Pay down the balance. •Obtain a limit increase on your accounts. It will cost you an inquiry whether approved or not. •A hybrid strategy is effective. This method will have the quickest impact on your score
Do NOT close any accounts in good standing.
Close all inactive accounts that have a derogatory record.
Challenge any negative accounts with a DLA (Date of Last Activity) longer than 7 years at credit bureau.
Negotiate collections off your credit report. Paying collection could lower your credit score. If the DLA changes, you also refresh the seven years the derogatory information will remain on your report. Remember from a FICO credit score standpoint it is the fact that you went to collections that hurts you. The damage is virtually the same paid or not.
Start paying your bills •On time •Every time •All the time• This one takes longer to impact your scores but it is necessary for MAX credit and a MoneySmartLife style going forward
Stop applying for credit No matter how tempting the multitude of easy credit offers with incentives you get, don't apply. The offers can be tempting and appear financially prudent with promise of further savings by just applying. But they can really mess you up.