In this post, you will learn 10 strategies on how to improve your credit score fast. Your credit score is 3 numbers that lenders use to measure how fast you will repay them in case they lend you money by credit card or loan. So it is vital that you have a good credit card rating to attract credit for your business or for personal use. Also, if you want to improve your credit card rating you can do so by learning how to do it from this post. Besides, you can increase your credit score by paying your bills early and paying down your debts fast.
I will list ways to boost your rating below and expand on each point. And you will also learn how credit scores are calculated, how to improve your score fast, what affects your score, and so on. Let me start now to show you how to improve credit score fast.
How to improve your credit score fast
How do they calculate credit scores?
There are organizations that are set up for this purpose. You can have different credit scores depending on the method used to calculate it and who did it.
The recognized models are the FICO score ranging from 300 – 850, Experian 330-830, Equifax 300-850, TransUnion 300-850 and Vantage score 501-990. And all these organizations use different algorithms to compute your credit score.
However, they all share what makes the score either go up or down though the degree will differ. Most of them consider your payment history on the loans you collect, credit cards, and how much revolving credit you use. Also, how long you opened your accounts and how frequent you apply for credit matters.
Steps to improve your credit score
If you want to learn how to improve your credit score fast, begin by checking the number on the internet. When you receive the scores you will see what is making your score go down or up. Then make changes and wait for the changes to show when your creditors report it.
Note that some factors are more important than others. Like payment history and credit use ratios. These two are up to 70 percent of factors that influence your credit score.
To improve your scores follow these steps below.
1. Pay your Bills on Time
The first strategy on how to improve your credit score fast is to pay your bills on time. Paying your bills on time will to a great extent show how reliable you are. This prompt payment would mean that if you are given a credit in future you would likely payback on time.
So when a lender reviews your report or asks for your credit score this will help them predict how you will behave in the future.
Make sure you pay your bills as agreed on the credit terms monthly. If you pay late, it will affect your rating. So pay all bills like car loans, student loans, rent, utilities, phone bills on time. You can make use of electronic devices like calendar reminders or instruct your banks to make automatic payments of your bills as and when due each month.
When you pay late or miss a payment it affects your record for 7 years and wanes as time goes on.
2. Receive Credit due when you pay Utility and Cell Phone bills on time
You may use the Experian boost to increase your credit score if you have been making your utility and telephone payments on time.
If you allow Experian to connect to your bank accounts to find out your utility and telecom payment history, once it is confirmed this will increase your FICO score in real-time. You can go to Experian website to learn more about the Experian boost and see if you can register for it.If you do, you will receive a free report, and FICO scores instantly.
Pay Your Debts Off and Reduce Your credit card and Revolving Loans Balances
Another tip on how to improve your credit score fast is the way you pay debts and use credit.
Your credit use ratio is vital in the calculation of your credit score. To get your score, they calculate it by adding all your credit card balances at any time and then divide the amount by your credit limit. For example, if you normally charge your account with $2,000 monthly and your credit limit on all your cards is $10,000 your ratio for using credit is 20%.
To find out how much credit you use in a year, add all your statement balances for each month on all your credit cards and divide it by 12 to get average credit you use monthly. Lenders like ratios that are lower, like 30%.
A low credit use report shows you use credit well. So, to get a good ratio, pay off your debts and make sure your credit balances are low. Another way a good credit ratio is to become an authorized user on another person’s account if they use credit in a sensible way.
4. Apply for a new credit account you need
Open accounts that you need, not just because you want to have a proper credit mix. If you do that, it will affect your credit score negatively. If you get unnecessary credit you may be tempted to overspend and increase your debt. Also, there will be many hard inquiries on your credit report.
5. Don’t Close Credit cards You didn’t use
Keep any unused credit card open if they don’t charge you annual fees. This is a smart move to take. But if you close an account, it will increase your credit use ratio. Also, owing the same amount and if you have fewer accounts, it may reduce your credit score.
6. Don’t apply for many new credits that lead to Numerous Inquiries
One other strategy on how to improve your credit score fast is to reduce the way you apply for credit. When you open a new credit card it will increase your total credit limit but when you apply for credit, this will cause a hard inquiry on your credit report.
And when the hard enquiries become too many, it may affect your credit report negatively. Though they will fade in time, these hard enquiries remain active for two years on your credit card report.
7. Dispute any inaccuracies on your credit reports
Check your credit report from all credit reporting agencies to confirm their accuracy. If you find any incorrect information that will drag your credit score down, confirm that those accounts listed on your credit reports are true.
If you find out any errors raise a dispute with the reporting agency or bureau to correct the information.
8. Register to Vote
If your name is not on the voting register, it will be hard for you to get credit. To improve your credit score, you should register to vote online or by post. This is a sure strategy on how to improve your credit score fast.
9. Moving home many times
Lenders are more comfortable when they see that you have lived in one place for a long time. So to improve your score have this in mind and don’t keep moving about.
10. Court Judgments
The last strategy on how to improve your credit score fast is to keep away from debt-related Court Judgments. If you receive any negative court judgments for a debt, this will no doubt affect your credit score. So find ways to negotiate with your lenders and get a loan work out from them if you are finding it hard to meet up the repayment terms. So do not allow the matter to lead you to the court.
In this article, I gave you 10 strategies on how to improve your credit score fast. Use the strategies to enhance your credit score, now that you know what leads to poor credit score and how credit scores are calculated.