5 Steps to Improve Your Credit Score | Small Business Advice

Are you struggling with bad credit? While it will take some time to repair your credit score, it is possible to “fix” your credit. The following five steps will help you get started:

Review Your Credit Reports

The first step is to review your credit report in detail from all three credit reporting agencies (Experian, Equifax and TransUnion). If you find any information you feel is incorrect, make sure you write it down. Since your credit score is calculated using the data from these credit reporting agencies, you need to make sure all the data is accurate.

Check for Errors

If you do find information that isn’t correct, you’ll need to reach out to the financial institution that reported that information. Some mistakes can be fixed quickly. For example, if you recognize the credit card listed but not the late payment, you can speak with the credit card company and have the issue fixed and updated. The best thing you can do is keep a thorough paper trail of your correspondence with each financial institution you speak with.

Rule Out Identity Theft

As you go over your reports, you might notice a balance you don’t recognize on a card you never use. You could be the victim of identity theft. To start managing the situation, you can use the government website IdentityTheft.gov. You can quickly report the identity theft and obtain a recovery plan. You’ll likely be asked to freeze your credit and file disputes with the credit bureaus.

Use the CFPB

If trying to right the situation with your financial institution doesn’t work, you can file a complaint with the Consumer Financial Protection Bureau. Once you submit a complain online, a case worker will be assigned to look into the situation further. This is where your detailed paper trail will prove to be useful.

Turn to Alternative Provider

Unfortunately, improving a bad credit score takes time – time an entrepreneur doesn’t have. If your trying to launch a startup but have bad personal credit, traditional processors won’t want to work with you. Without a merchant account, your business will be unable to process ecommerce transactions. An alternative provider, on the other hand, specializes in working with merchants considered “high risk”; this includes those with bad credit. A bad credit merchant account provides you with the card processing services you need to operate safely and efficiently, while also helping you rebuild your credit score.