How to improve your credit score

Given that an article entitled “Improving Your Score” appears on The Simple Dollar, most readers might assume that the tips that follow are going to deal with improving their credit score.

They would be right – at least in part.

However, most of the principles one would use in dealing with a credit score are pretty much the same as dealing with any life score that one wants to alter. A cholesterol score. A test score. A final time in a 5K run. One’s weight.

Whenever you have a tangible way of keeping “score” on something, there are some fundamental techniques that you can use to improve that “score,” no matter what that score is. They work over and over again in life, from matters of personal finance to personal health, from leisurely pursuits to professional objectives.

Got a score that you want to improve? Here’s the game plan.

Read. Why exactly are your numbers not where you want them to be? What kinds of techniques are commonly employed to improve that score? The answers to these questions usually involve a significant amount of reading and knowledge acquisition, so the first step to improving your score is to hit the library.

The key thing is to remember the two key questions you want to answer: why (is my score bad) and how (can I improve it). All of your reading should be geared toward coming up with lots of answers to both of these questions. The more answers you have, the better.

Develop a plan. Once you have your lists of whys – and the respective list of how to solve those whys – you have the materials you need to develop a plan. Go through that list of hows and choose a subset of them that’s challenging yet feasible within your life. Don’t choose activities that are simply outside your abilities or aren’t ones that you’re going to realistically follow through on.

A good plan sets forth clear steps for you to follow and offers up milestones for success along the way. A good plan makes the “right” behavior as clear as the “wrong” behavior. A good plan pushes you toward better behavior, but doesn’t make things impossible, either.

Check that plan. Once you’ve developed a plan for improving your score, have someone else with fresh eyes check that plan. It’s useful if that person is an expert, but it’s also useful if that plan checker is simply someone who cares for you. Close friends are great plan checkers, as are spouses.

What are they looking for? They’re basically there to be your reality check. Are the elements of your plan truly realistic? Or are you missing some sort of crucial detail that you overlooked along the way? You have to take their criticism of your plan for what it is, which is simply their best attempt to help you succeed.

Stick with that plan day in and day out. When you have a plan in place, it’s up to you to stick with it. From my own experience, I can tell you that it’s vital to never give yourself permission to violate a plan, because once you give yourself that permission, it’s very easy to permit yourself to do it again … and again … and again until the plan is useless.

That’s not to say your plan shouldn’t have any breathing room in it. Every good plan makes some room for the unexpected. A great financial plan makes room for unexpected expenses. A great exercise plan makes room for acts of God. A great diet plan makes room for splurges.

Take a revised score (but not too often). Since this entire process was started by a score that you didn’t like, you know that you have the ability to check that score again in the future, whether it be your credit score or your weight or your debt total or anything else. I recommend checking that score from time to time, but I suggest doing it monthly at most.

Checking your score every day is actually somewhat counterproductive, because it’ll often give you a sense that you’re not making progress when you actually are. For example, if you start checking your weight every day after starting an improvement in your diet and exercise trends, you’re going to be disappointed, and disappointment is a direct route to failure.

Good luck! Let’s improve those scores!