It’s a common question around these parts: How do I fix my credit? And, while credit scores have a lot of nuances, the answer is actually quite simple: pay all your bills on their due date, keep your debt levels low, add a mix of accounts as you can. allow and voila! – your credit score should increase steadily over time.
Truth be told, there is no guarantee for a rapid increase in credit. The exact point increases will vary based on your complete credit profile, and even if you switch to top credit, your score is tied to a lender’s timeline when it comes to reporting new information to major creditors. credit bureaus.
Most creditors provide updates to the Big Three bureaus every month – which means, yes, you can increase your credit in 30 days, but a shorter time frame sure goes a long way.
Still, there are a few steps you can take to try to increase your credit score short term. Here is a list of 10 of your best options.
1. Pay off your credit card balance
The credit utilization ratio – the amount of debt you carry over your total available credit – is a big part of credit scores, right after payment history. But even if you can’t just wipe a missed payment off your credit report (most negative information takes seven years to age your credit reports), you can easily increase your usage rate by wiping out big card debt. credit.
Experts generally recommend keeping the amount of debt you owe collectively and on individual cards below at least 30% and ideally 10% of your credit limit (s).
So if you’re on the verge of maxing out one card and / or have big balances on each of them, paying off those debts can spike up quickly. Just make sure you pay the charges before your statement bill date, as opposed to their actual due date, as this is when most creditors will update account information with the creditors’ offices. credit.
And, of course, refrain from making new purchases once the debt is eradicated.
2. Request a credit limit increase
Essentially a different solution to the same problem – you may be able to improve your usage rate by having an issuer give you a higher limit on one of your existing cards. Just make sure you don’t use that extra credit. Otherwise, this movement can have the opposite effect.
And be prepared to see an initial blow to your score – sometimes creditors pull your credit when you request a limit increase, which could make your credit report investigation difficult and cost you a few points.
You could easily make up these points and then some, however, if the increase in the credit limit is large enough.
3. Get an error removed
Mistakes on credit reports are more common than you might think, so it’s important not to just take a bad score at face value – especially because removing an error can be one of the ways the fastest of fix your credit.
The Fair Credit Reporting Act requires bureaus to investigate and remove items deemed to be errors within 30 days of filing a dispute.
That’s why it’s a good idea to take your credit reports – you can do it for free every year at AnnualCreditReport.com – and review them regularly for any inaccuracies that could put your credit down unduly. Make sure you dispute any error you are with the credit bureau in question.
4. Clean and refine your credit report
Once you have received a copy of your credit reports from the three major credit bureaus – Experian EXPGY,
and TransUnion, TRU,
you can take a closer look at every element there.
You’ve read about removing an error before, and it’s a good step to take, but don’t stop there. Look for any accounts you have on your credit profile that show late or missing payments, and verify that each item is correct. If you see something wrong, send your objection so that the problem can be investigated.
5. Attempt to pay twice a month
Yes, you might be paying off your balances every month and paying them on time, but you should keep in mind that your creditors only report your balances to the credit bureaus once a month.
If you have a credit card, for example, that you constantly max out and hit your limit throughout the month, the statement you receive will show the balance. You make the payment, but since it was only reported once that month, it basically shows that you are using up 100% of the available balance on that credit card.
However, if you send payments twice a month, you are essentially halting your payments and keeping your overall credit card balance much lower than if you only pay once a month.
6. Open a new credit account
If you want a nice boost in your credit and want to help improve your credit utilization rate, you may want to consider opening a new credit account. This is especially useful if you find that your current credit utilization rate is far too high.
Opening the new account increases the available credit you have and will show that with the new balance you are using less. However, this is not a good option if you are already juggling multiple accounts. You can end up hurting your credit instead of helping it if you try to stretch your credit too thin.
7. Open negotiations
Have you taken a closer look at your current debt? Have you considered negotiating the debt you have in collections to rebuild your credit? Many collection agencies will be willing to negotiate as they really won’t lose any money on the debt if you are able to settle for less as they most likely bought the debt account at minimal cost.
It never hurts to open a negotiation to try and settle the debt you have for a smaller, more manageable amount on your credit accounts. If you find that you are unsure of this process, or if you are unsure if it is something you should do, you can always seek the help of a credit counselor to help you educate yourself. about the process and offer suggestions on what you can do otherwise.
8. Become an authorized user
Another quick way to increase your credit could be to become an authorized user on someone else’s credit account. For this option to be viable and recommended, you will need to find someone you trust, such as a close friend or relative, who is financially responsible and willing to do it for you in order to improve your credit rating.
As an authorized user on someone else’s account, their account will always appear on your credit report, and their payment history, credit usage rate, and credit card balance will be included. your credit history and can give you a good credit rating. However, not all credit card companies report authorized users, so you’ll want to make sure that if you become an authorized user, the account information will show up on your credit reports.
9. Make monthly payments on time
In addition to paying into your accounts twice a month, you also need to make sure you make your payments on time each month. Your payment history represents approximately 35% of your FICO score.
If you’re having trouble remembering your due dates, consider placing your accounts on Auto Pay with reminders so that it reminds you that the payment is due and that it will then automatically make the payment for you.
10. Mix up your credit choices
Finally, be sure to mix up your credit choices instead of just focusing on your credit cards, for example. Using different types of credit can quickly increase your score, although that wouldn’t be a significant boost.
If you need an appliance, instead of using your credit card, you should consider a small personal loan instead. This shows that you can use different types of credit efficiently and responsibly.
The fastest way to increase credit after bankruptcy
Bankruptcy is one of the biggest hits for your credit. People are often anxious and ready to start building credit after bankruptcy. In theory, someone looking for credit after bankruptcy may actually seem less risky because they can’t qualify for Chapter 7 for another eight years.
Following your bankruptcy, it is recommended that you make all of your payments on time, learn how to manage your money effectively, and find ways to restore your credit without trying to borrow money too early and it might work. prove to be the fastest way to do it. create credit.
You should also keep a very close eye on your credit reports and major credit bureaus scores and look for any errors or inaccuracies, including any errors with your address, job or personal contact information.
The best way to start improving your credit after bankruptcy is to open a secure credit card account and make your first deposit into the account.
There is no miracle cure
While these strategies are a good start, keep in mind that credit reporting agencies can still take several months to report improvements on your credit report.
While they may be “quick” methods, they are definitely not quick fixes for credit, so you need to be patient to see the positive effects on your credit report.