Raising Credit Score Denver CO

Q: I am a college student who is just coming out of credit card debt. I opened a number of credit cards a few years ago and needed to work with a debt consolidator over the past 2 years to pay them off. I am finally debt (and credit card) free, but now I am unsure how to begin raising my credit score. What should be my next step?

Allan

A: Dear Allan,

First of all, congratulations on becoming debt free. I know it feels good and you should be proud of your accomplishment!

To get a good start on rebuilding good credit, I suggest you start by taking a very close look at all of your credit reports. You can get a free copy of each report at annualcreditreport.com. It is important to make sure that all information currently reported is accurate and up to date. Be sure your debt payoffs are recorded properly. You want to put a positive light on a damaged report. You might consider adding a brief statement to each report (credit bureaus allow about 100 words), explaining what caused you to struggle. This will help those reviewing your reports in the future to better understand your situation and perhaps help them approve your credit request.

My next recommendation is to create and use a "spending plan." A spending plan is a detailed forecast of your income and expenses for each month of the coming year. Creating a spending plan will help you account for all of your income and find extra money available to start a savings and investment plan. If possible, pay the same amount into a savings account that you used to pay toward your debts. Also, be sure to balance your checkbook regularly....