By Danielle Keech for MilitaryByOwner

Credit scores rule the world. At least it feels that way, doesn’t it? They’re like these tiny little dictators, running around, interfering with every home sale, rental application, vehicle purchase, and more.  

It feels obscure, but did you know that your score isn’t random? Though it might feel like it at times, it’s not like disobeying your parents as a kid and waiting to see which consequence you get today. The score is calculated, and it fluctuates both ways on the spectrum. 

Here’s what makes up your score: 

• 35% payment history
• 30% credit utilization
• 15% length of history
• 10% types of credit
• 10% new credit

Why is this important to understand? Because it helps you manage it. Since your credit score influences most (if not all) of your financial decisions, learning how you can affect it gives you control or at least the knowledge to. 

So, let’s talk about how you can head down the road to improvement. Here are four ways to repair your credit score:

1. Fight errors.

To err is human—even on your credit report. Not every bad credit score is due to discrepancies in the report, but if you don’t know what’s on yours, now is the time to find out. 

If you happen to notice an error or two, there’s a well-laid path to follow with the Federal Trade Commission (FTC) and might be the easiest/fastest way to give your score a bump! Here’s some advice from MilitaryByOwner’s article, How to Rent a Home with a Bad Credit Score (see article for more details!): 

“Step 1: Tell the credit reporting company, in writing, what information you think is inaccurate. Use the FTC’s sample dispute letter. Include copies (not originals) of documents that support your position. 

Step 2: Tell the information provider (that is, the person, company, or organization that provides information about you to a credit reporting company), in writing, that you dispute an item in your credit report. Use this sample dispute letter.”

2. Pay your bills on time. 

Though the effects may be slow moving, paying your bills on time is the best way to get your credit score up and maintain it. If this is where you struggle and your credit is lacking, there are a few things you can do to help create better habits:

• Account for processing time. Both mail-in checks and online payments take time to process. Some take three to five days, while others take over a week. Your job is to account for it! Try setting a timer for the same day each month, and submit your payment early. 
• Set up automatic payments. Most companies offer auto-pay—even USAA offers auto-pay for their loans! Gone are the days that you have to remember to pay your bills, and as military families with bills moving and switching around every few years, this is reason to rejoice.
• Use a calendar. You undoubtedly have a calendar for your personal affairs. Create a separate, clean, and organized one for only your finances. This way, you can take a quick glance at it and set reminders to keep you on top of your financial transactions, both incoming and outgoing.

3. Increase your credit limit, but keep spending low.

Credit utilization makes up 30% of your credit score. So keeping your credit card balance low is a substantial component to raising your overall number. Many recommend the 30% rule—saying that you should spend no more than 30% of your credit limit. If you pay your bills with your credit card to get points and work toward incentives, then it could be hard to maintain this number. So, consider increasing your credit limit so that, while you don’t plan to spend more money, the percentage remains low or hopefully decreases.   

4. Get out of debt.

The very best thing you can do for your finances? Get out of debt! As soon as you stop paying for previous purchases you made, you can start to really take control of your financial future and redirect those funds toward positive investments and retirement.

Getting out of debt can feel a little daunting, so here’s a game plan if you need it—again, from our above article:

“Step 1: List your debts from smallest to largest, regardless of the interest rate.

 Step 2: Make minimum payments on all your debts except the smallest.

 Step 3: Pay as much as possible on your smallest debt.

 Step 4: Repeat until each debt is paid in full.”

As you embark on the journey to rebuild your credit score, take a deep breath. It takes time to see the positive effects of your labor, but in the long run, they are well worth it. A piece of advice? Bring in an accountability partner. Let friends and family know what you’re working toward, so they can encourage and cheer you on along the way!