1. Balance Reduction Technique

Most borrowers are overwhelmed when they look at their overall debt picture and wonder how they are going to pay off all or any of their debt.  The first step is figuring out which debts are influencing your credit score the most and focus on those first.

Here are the debts you want to focus on first. 

1.) Pay down the balance of a revolving account to a small amount (such as $10 or $15), specifically those that have a past due balance or those with a balance greater than half of the available credit limit.

2.) Transfer a maxed credit line balance to another card that isn’t over half the credit line.  The idea here is to get as many of your revolving accounts to have a balance less than half of the credit limit.

3.) If a credit bureau is reporting a significant difference (over $100) in the total balance owed on an account, then make sure you mark this as an item to include in one of your dispute letters, so that the bureau can update this.  Keep in mind however that if you recently made a payment on an account, sometimes it takes a while to update and the creditor might report at different dates to each bureau. 

4.) Charge a small balance to an open revolving account with a zero balance.  For example, go out and charge a small amount (such as 10$) to a credit card with good payment history.  Remember however to make a payment on this new charge because you don’t want them to report it late should you forget about it.