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Created with Fabric.js 1.4.5 77 According to a 2014 report from the Urban Institute, approximately 77 million Americans had debt in collections that year. And that figure just includespeople who are behind on payments; it doesnt include the millions of people who have poor credit because they lack a credit history. 608 712 580 Face the Music (and Your Credit Report) 1. By law, everyone is entitled to a free copy of their credit report from each of the credit reporting agencies every year. You can access your freecredit report at Look over your report to see what kind of information might be hurting you and create a plan to address it. If you find any errors, you can dispute them with the three credit reporting agencies: Equifax,Experian, and TransUnion. 2. Focus on Paying Off Debt According to Experian, paying down debt is one of the smartest moves you can make when it comes to improving your credit score. If your credit utilization is high due to maxed-out accounts, payingdown your balances will improve your debt-to-limit ratio and thus improve your score over time. As an added bonus,paying off debt will also help you save money on interest. 3. Pay Your Bills on Time Delinquent payments and collections can have a major negative impact on a credit score, warns Experian. In other words, you need to make sureyou are paying all your bills on time so they dont go to collections and wreck your score. If you havetrouble remembering your due dates, set reminders on your phone or simply put them on auto-pay online. Whatever you do, continue paying all your bills on time while you focus on paying down debt. 4. Consider a Secured Credit Card First Whether youre trying to build credit for the first time or simply trying to rebuild poor credit, a secured credit card might be just what the doctor ordered. Secured cards are just like traditional credit cards except that they require you to put down a deposit ascollateral. And while they tend to come withlower credit limits and few perks, secured cardscan help you prove your creditworthiness over time. 5. Dont Open Any New Accounts When youre trying to build your credit, it might be tempting to open a ton of new accounts to prove yourself. However, that plan could backfire. According to Experian, opening too many new accounts could harm your credit score. Instead of going that route, Experian suggests keeping any old accounts open to increase the average length of your credit history. You can also ask your creditorsto increase your credit limit if you can handle theresponsibility; raising your limits could improve yourutilization ratio and your score in one fellswoop. WITH FIVE SIMPLE STEPS IMPROVE YOUR CREDIT SCORE CREDIT SCORE MILLION
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