If you’ve ever been declined for a loan because of a low credit score, you may be scouring the internet for creative ways to raise your credit score 100 points overnight. However, the reality is that’s just not possible.
The truth is, you can definitely raise your credit score; it will just take some time.
Pay Your Bills on Time
Each time you pay late or skip a payment, your credit score gets dinged. A lot of dings and you’ll end up with a lower credit rating. You can always request that the due date be moved to a more convenient time for you. The company may or may not do it, but it is certainly worth asking.
As soon as you start paying your bills on time, you should start to see small improvements on your credit rating.
Check Your Credit Report
You can get free copies of each of the big three credit reports (Experian, TransUnion and Equifax). They are required to give you one free report every year. You can also visit Annual Credit Report for your free yearly credit report. Go over it very carefully. If you see errors, fraud, wrong address, or other incorrect details, contact the credit reporting agency immediately. You’ll need to do it in writing and you may need to be persistent.
Generally, you should not have anything older than 10 years on your credit report, and most loans have a seven-year age-out. You should also not have tax liens or civil judgments on your credit report.
Reduce Your Balances on Revolving Accounts
Revolving accounts, like credit cards, allow you to constantly borrow and pay back sums up to your credit limit. Make it a point to maintain the revolving loans at 30% or less of available credit.
Use this formula: (Loan amount/ credit limit) x 100
Don’t Apply for New Cards or New Credit
Those opportunities to get new cards and get something off your bill are tempting. The problem is that every card you apply for will end up with a hard credit pull and that hurts your credit score. Try using cash for big purchases instead of getting a loan to go on vacation or buy something smaller than a house (or maybe a car).
Pay It Off
Pay off past-due accounts. Then, if you can, pay off credit cards, car loans, etc as quickly as you can. You’ll see a fast bump upwards as you do that.
Build Credit Fast
If you have no credit or are recovering from a bad credit score, try using a credit card ONLY to pay monthly bills. Pay the balance on time and in full every month. Showing responsible behavior is the fastest way to improve credit scores.
Final Word About Increasing Your Credit Score
If you follow these suggestions, you should see improvements within a couple of months. You may not boost your credit score overnight or raise it 200 points in 30 days, but you should definitely see some changes. Occasionally, you will even see big jumps. The short version is pay on-time, check your credit report annually, and use credit carefully and wisely. You should see improvements quickly and maintain your good credit rating once you get where you want it to be.
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