5 Creative Ways to Boost Your Credit

From the February 2008 edition, Essence, Volume 38, Issue 10, Page 92.

By Latif Lewis

Improve your score in one year or less!

Sloppy spending habits can wreak havoc on your credit score. But remember, you're in control of those three digits. If your credit score has been losing ground lately, here are five creative ways to improve it:

Report nontraditional forms of credit. Bills may include child support, rent and cell phone. Payment Reporting Builds Credit (prbc.com), a consumer reporting agency in Maryland, records your payment histories for up to three years. "We want to make it so that a consumer's bill-payment information-which is often missing from the Big Three [credit reporting agencies Experian, TransUnion and Equifax]-is included in the score and the decision" that lenders make, says Michael G. Nathans, founder of PRBC.
Get a secured Credit Card. It's designed to rebuild or establish credit. But "FICO doesn't distinguish between unsecured and secured cards, so all the same scoring rules apply," says Barry Paperno, manager of the customer care center for myfico.com. Make payments on time and verify that the bank reports your account to the bureaus.
Reduce your interest rate. If you are in good standing (think six months of on-time payments), ask your creditors to reduce your interest rate. If that doesn't work, consider transferring a balance to a lower interest rate credit card. If you make the switch, try to pay off that credit card before the promotion period ends.
Stay abreast of changes in the industry. For example, there is a point disparity between the widely used FICO and the new Vantage scoring models, says Terrel Alexander, CEO of Cherry Hill, New Jersey-based Credit USA. In addition, the two models also look at different key areas of credit history that may affect your score.
Focus on rebuilding rather than removing. Abigmisconception consumers have is "their score won't improve until the 'baddies' fall off," says Paperno. But "the score is very forgiving," he says. "Whether you owe $10,000 or $50,000, what matters is how much you're paying every month and how long you've had it."

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