 TITLE: How to Improve Credit When Living Paycheck to Paycheck CONTENT: Step 4: Increase Your Credit Rating\n-----------------------------------\nAs you're working on closing the financial gap between paychecks by reducing expenses, focus on getting your credit history in a healthy place. Check your credit report and then take a look at your credit scores. Once you see where your credit is at, you can take steps to improve it.\nSome actions you can take to increase your credit scores won't cost you a penny:\n*   **Clear up any errors.** If you spot any errors on your credit report, you can dispute them for free. They may include evidence of fraud (such as credit cards or loans that you didn't open but now have an outstanding balance) or collection accounts that are older than seven years. Investigations take about a month, and if the data is removed, your credit reports and scores will automatically improve.\n*   **Add non-traditional accounts.** If you have too little on your credit reports—called a thin file—because you don't use credit cards or have never taken out any loans, consider adding your cell phone and other utility accounts to your credit report with Experian Boost™† ™, a free tool. When those on-time payments appear in your credit file, they will be calculated into your scores, often giving them an instant hike.\n*   **Be prudent about pursuing new credit products.** When you apply for a credit card or loan, the lender will add a hard inquiry to your credit report. In general, these inquiries have a minor impact on a credit score. For a FICO® Score☉ , one additional credit inquiry might take less than five points off, but they have a greater impact if there's not much on your report.\nAlso concentrate on the actions that matter most to the credit scoring models: the way you pay and the amount you owe. Payment history has the biggest impact on your credit scores, counting for 35% of your FICO® Score, so it's important to pay your bills on time every month.\nIf you already owe quite a bit on revolving debt such as credit cards, eventually you'll want to tackle that debt. After payment history, credit utilization—or your balances as a percentage of total available credit—is the second most crucial scoring consideration, so if you can bring your balances down, your scores should go up.\nYou can end the cycle of living paycheck to paycheck and at the same time ensure that your credit is in a healthy place. Does it require effort? Sure, but when you're finally meeting your bills and have built a credit history that will keep your opportunities open wide, it'll be worth it. END