Financial Renewal

by Elisabeth Leamy

In my world, “renewal” means financial renewal. There is one and only one key to get started: a good credit score. Why? Because raising your credit score enables you to get credit for less and save thousands.

Here are five steps you can take –some slow, some flashy—to raise your score.

Pay down debt: If you have any savings on hand and you can put it toward your credit card debt, your score will rise as soon as the payment is reported to the big three credit bureaus.

Pay on time: You must do whatever it takes to pay your bills on time. If you’ve paid late in the past, the good news is that your most recent payment history carries more weight than past mistakes, so beginning now to pay on time every time will raise your score.

Ask creditors to delete single sins: If your overall payment history with a company is good and you make one glaring mistake, you may be able to get the bank or credit card company to delete it.

Keep ratios low: Credit scores place a lot of weight on the ratio of how much debt you carry to how much credit you have been approved for. To improve your score, charge up no more than 30 percent of your available limit.

Move your money around: Since it’s best to only charge up 30 percent of your balance, if you have one card that is near the limit and another that has little or no balance, you can get a little boost by moving the debt from the former to the latter.

Become an authorized user: Another way to establish or improve credit is to be added as an authorized user to another person’s account. Even though you’re responsible for paying the bill, the account — and all its positive history — will show up on your credit report.

Massachusetts Conference for Women speaker Elisabeth Leamy is the consumer correspondent for ABC News’ “Good Morning America” and is the author of “The Savvy Consumer” and “SAVE BIG.” Leamy has received 13 Emmy Awards and four Edward R. Murrow Awards. www.elisabethleamy.com