Question: How do you Improve a Credit Score?

The thing that frustrates me the most - the most! - about the credit system is all the scammers and liars out there telling people that they need to buy this or do that to improve their credit. It can be nearly impossible for consumers to tell the difference between the good guys and the bad guys. Here's a question I got today:

Can you comment on the idea of improving your credit profile in order to improve your score? I listened to a free podcast from Trump University last night. It was basically to get you to buy a program from Eschelon Credit Advisors. He talked about how the score is created, tier 1 score, how much credit toward your score you get for each type of account, etc. Thanks.

Point 1: There is NO WAY to buy a better credit score. Credit counseling programs are junk. Credit repair is a fraud. Like Liz Lemon would say "Deal breaker!"

Point 2: The best way to improve your credit is on your own. There's nothing that these paid services do that you're not better off doing on your own for free. And if you have access to Google, there's no reason you can't figure it all out.

To improve your credit score you first have to know what went wrong. Diagnose and prescribe...just like healthcare. Here are a few of the common issues and treatments:

• No Score: You don't have enough credit history to generate a score. The solution is to open an account and use it responsibly for a few months. Auto loans and secured credit cards are the easiest to get.
• Too Much Debt: There's an extremely confusing part of credit scores where they calculate how much of your total credit card limits you're using. Basically, if you're maxed out it is hurting your credit. So, either pay down your credit card debt or increase your credit limits.
• Skeletons in the Closet: Old collection accounts, late payments, bankruptcy filings, etc are very damaging to your credit. Unfortunately, these all have set 7-10 year expiration dates and can't be removed earlier. Your best bet is to work on adding positive information to your score with a secured card or other account and to wait patiently for the expiration.
  
• Errors: They're not as common as you would think, but mistakes or fraudulent records on your credit report can hurt your score. For these, submit a detailed dispute letter to each of the credit bureaus. The process takes a couple weeks but can be rushed by a mortgage lender.

If you know more specifics on the "diagnosis" for your damaged credit, I'd be glad to go into more detail on the cures!