- 1). Check your most recent statements for each credit and store card you have. Note the credit limit and the balance owed. Use a calculator to divide each balance owed by the credit limit and press the percentage button. This will give you the percentage of credit used for each card. Put to one side any statements where the amount used is 20% or less. Those that exceed 20% can be used to raise your credit score immediately.
- 2). Sort the remaining statements into order with the highest percentage of credit used on top. Work out how much needs to be paid to reduce the percentage down to 20% or below for each and make a note of the amount. Select the credit or store cards for those that you could comfortably reduce down to 20% or less in one single payment. Don't overstretch your budget.
- 3). Choose cards that have an outstanding balance or around 60% or more. Remember it is the percentage reduction that will enable you to raise your credit score, not the amount of money required. A card where you need to pay $200 to reduce it to 20% has the same effect of raising your credit score as a card where you would need to pay $1,000.
- 4). Select cards with smaller manageable amounts that you can afford and make a payment to each lender. This will raise your credit score with the credit reference agencies as soon as the balances are reported by the credit card company.
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