A good credit score can increase your chances of getting a car loan, a mortgage, or a lease. Your credit scores also affect your credit card interest rates, as those with low credit scores are taxed with higher interest rates. While credit scores can range from 300 to 850 the average American score is 715. Because things like credit and personal finances are rarely taught in schools, many of us learned the hard way that a few financial slip-ups can cause your credit score to take a dive. Even if your score is underwater, you can still breathe. You have the power to change your score with these ten steps.

1. Request your credit report. Experian, Equifax, and Transunion are the three major credit bureaus responsible for tracking your financial history. Pull a free credit report and review it for accuracy. 
2. Report any errors. If you see any discrepancies on your credit report, such as identity errors, incorrect balances, or delinquencies, contact the credit bureau to have them corrected or removed. 
3. Pay down your account balances. There are several repayment strategies to help you pay off revolving credit accounts. The debt snowball method involves paying off the smallest balance first, then repeating with the next smallest debt. The avalanche method involves paying off debts with the highest interest rate first, then repeating with the next highest interest rate.     
4. Consolidate debt where you can. Owing money to multiple lenders can seem overwhelming. Consolidating your debt using a balance transfer credit card or personal loan may make it easier to pay off by moving high-interest debt to a lower-interest product.
5. Maximize your tax refund. Use 70% of your tax refund to pay off your debt and use the remaining 30% to build an emergency fund or establish a savings account.  
6. Always make a payment. The goal is to pay credit card balances in full every month. But you should always make a payment even if you cannot pay the amount in full. 
7. Pay on time. Paying on time is an important factor in the calculation of your credit score. Review your statement and track the payment due date. If the payment due date falls before your payday, you can call the lender to change your due date.  
8. Obtain a secured credit card. Rebuilding your credit can be difficult if you have a low credit score or no credit history. If you are unable to obtain a traditional credit card, a secured credit card can help you build healthy credit.
9. Avoid hard inquiries. Applying for a car loan, a credit card, or a new line of service on a cell phone can trigger a hard inquiry on your credit report by the lender. Too many hard inquiries over a short period can negatively affect your credit score. 
10. Get help from a certified credit counselor. Don’t get trapped by companies offering to fix or consolidate your credit for a fee. Louisville Urban League Financial Empowerment Counselors do not charge for their services. They can help you make a budget, analyze your credit report, compose a plan to pay down debt, and place you on the road to financial freedom.  

Although a low credit score can be a barrier to achieving seemingly practical dreams, a barrier does not have to be a dead end. The road to better credit scores is just around the corner. Let the Louisville Urban League help you move through your barriers and toward your dreams. 

The Louisville Urban League is dedicated to fostering economic empowerment in order to elevate the standard of living in historically underserved urban communities, with our focus on Jobs, Justice, Education, Health, Housing, and Black Business.

We provide many services, including job coaching, record expungement, health navigation, financial counseling, and support for small businesses.

For more information call (502)585-4622.