5 Ways to Increase Your Credit Score Quickly
Your credit score is more important than you might think. It’s not just for getting loans anymore. Some service providers will check your credit before entering into a contract with you. You can be denied a place to rent because of bad credit. Even your employer can check your credit before they hire you. You see, credit is much more important than just for credit cards and loans.
Unfortunately, when you have bad credit (or a low credit score), it’s much harder to get good rates or even approved for anything. It becomes a chore. Luckily, with some work and tenacity, you can turn your bad credit around and increase your credit score. We’re going to talk about five ways to do just that.
My good friend Donny provided the content for this article. You can check him out at PersonalIncome.com for more information.
Unless you’re able to pay for all of your expenses with cash, your credit score will determine what type of loan and interest rate you will qualify for when it comes to your expenses. Your mortgage, car loans and credit cards are all determined by your credit score. The higher your score, the more likely the bank will be to trust you on repaying the loan. Your credit score can also affect your ability to get a job, find an apartment, or even get insurance. They are used more than most people realize, so striving for a high credit score is very important.
If you’re in need of a loan from a bank and would like to ensure you get the best rate possible, there are ways in which you can raise your credit score rather quickly. Of course, the best way to maintain a high credit score is to pay all of your bills on time and have a low debt-to-income ratio at all times. Assuming you’re doing that and you have no huge red flags, such as a bankruptcy, here are five other ways in which you can increase your credit score in as little as just a few months.
Take an in-depth look at your credit reports
Pull your credit reports from the three national credit bureaus – Equifax, Experian and TransUnion. Make sure everything is accurate and if it’s not, get it taken care of immediately. Typically, accounts that are in collections remain on your credit report for seven years, so if it’s been longer than that and you still see those items being reported, make sure to call and have it removed. You can get your credit reports every year for free or you can just use a service like Credit Sesame.
If you have a credit card, check to see if they allow free credit scores as part of using their card. I know Discover, Barclays, and many others do this now as part of their service. This means you can get your FICO score for free through their online service portal.
Pay off as much debt as possible
If your credit cards are maxed out, paying them down can help raise your credit score quickly. While it may seem impossible to come up with the money, if you get creative, you will find ways. You can start a side hustle such as freelance writing, pet sitting or being a virtual assistant. You can sell items you no longer use on Craigslist, eBay, or Gazelle. You can also pick up a part-time job or perhaps even borrow the money from a trusted friend or family member.
If you’d like to earn extra money anyway (who wouldn’t?) then make sure to check out all our making more money articles to help you with finding a way that works for you.
Have your credit limits increased
After you’ve paid down as much debt as possible, call your credit card companies and ask if they can raise your limit. This increases your total available credit and reduces the percentage of debt to available debt that you have, which looks good to lenders. A fair warning – do not increase your spending to go along with this higher credit limit.
Many issues will allow you to ask for a credit increase right in your online portal. It’s pretty easy, especially when you’ve paid down a large amount of debt. The online site for your credit card is the easiest way. If they deny you, then call the company.
Use your credit cards responsibly
It’s a catch-22, but in order to have good credit, you need to use your credit. Using your credit cards regularly and paying them off in full each and every month is a surefire way to boost your score. If you don’t like the idea of putting all of your monthly expenses on the credit card, perhaps you can put only your gas on the card. In addition to helping your credit score, using a credit card responsibly can also give you added bonuses such as rewards points, cash back or frequent flyer miles.
Also, if you’d like to still use your credit card, but want to have it work more like a debit card, check out the service from Debitize. It’s quite interesting and has helped out many who are in debt.
Related Read: Here’s how I save nearly $400 a year by using my credit card regularly
Ask to have items removed
Maybe you made a late payment on your mortgage two years ago or perhaps you stopped making payments on your MasterCard because your income went down last year. We’ve all had rough periods in our life and that doesn’t make you a bad person. Call the creditor and ask if there’s anything that can be done to have that “blip” removed from your report. You may have to pay the balance in full or write a letter explaining what happened, but if it works, your credit score will be instantly boosted and there is absolutely no harm in trying.
Once your credit score is where it needs to be, you have to continue working to maintain your high score. Keep your debt down, automate your payments so you won’t miss any and pay off your credit cards in full every month. Also, pull your credit report on a yearly basis (AnnualCreditReport.com does this for free) to check for any errors and dispute them immediately.
Related Credit Resources
Here are the resources talked about and ones which will help you with your finances in general.
Author Bio: Donny Gamble Jr. is founder of Personalincome.org, a published author, and investor. He graduated from The Ohio State University and has a passion for teaching others about alternative investment and retirement strategies. He is a contributor for Huffington Post & AllBusiness.com, along with other personal finance websites.
I was so surprised of the mistakes I had on my credit report. After I took care of the discrepancies I was amazed of how much it increased my score. So I am a witness that it is very important to pay attention to your report on a monthly basis.
Petrish, I heard many rumors that the credit bureaus and banks make errors on purchase so they can charge high interest rates for stuff. They know that the process of getting an error off of your credit score is very tedious and time consuming.
In the long run is it better to have more accounts or fewer accounts with higher credit limits?
The age really has a big factor in that situation. If you have a few old accounts with high credit limits, then you should be good. If you have a ton of new accounts with low credit limits, but not utilizing it, then your score will not be as good due to the age factor.
We don’t have credit scores in my country, so we’re not experienced with this, but it makes a lot of sense to apply these strategies and get a better number. All these would show potential lenders that you are a good ‘payer’ and will not cause any issues in the future.
I am really confused on where to start. My credit score is poor and I now have the means to start working/changing that. Other than my car payments I don’t have any “open” accounts everything is closed, charged off or some sort. So I want to make right on those accounts but how? How do I choose who/what gets paid first? I just want to right this so I can be credit worthy! Buy a home! not have a car with a 19% interest rate! My eyes are crossing looking at my credit report. Any Suggestions?
We’ve gone through an awful couple of years. I used to pay my cards religiously but now they’re at the point of offering me either a payoff plan and/or write off. If it’s at this point, will paying them off reflect well at all to increase my score? I have several medical bills ranging from $25-$400. I don’t want to go bankrupt but if I pay all of these and still have 7 years of damage, what’s the point? Thanks for any advice
Depending on the plan, it could add an even worse mark on your credit than working to pay them off. Paying them off will help you in the long run with your score, but it’s going to be a slow process.
I’m concerned about very old unpaid items that are now being passed to new collection agencies and are turning up on my credit report. I’ve been told that every time the collection agency sends out a new letter, that starts the 7 year clock ticking. How does anything ever get removed if that’s the case?
I have a good credit scores and maintain it because I use my credit card responsibly and pay my bill on time. These are just two but it gives me a good standing or chances when I get a loan approved.
I had learned to manage my finances efficiently at a very early age. I used to pay for my own car insurance soon after I started earning. I never used credit cards carelessly. IMO, it’s in your best interest to avoid using credit cards on those purchases that you can actually do without.
Yes, if you can’t use credit cards efficiently and wisely, then it wouldn’t be of any help.
okay so what about having a card that was paid off to the side for emergencies only 500 $ some one stole it out of my truck and went and maxed it out at the casino . Even though I canceled the card cause it was stolen they still expect me to pay it off. Even though of course I don’t even have the card.
Ive disputed it but they still keep putting it back on my credit. And another on also maxed out ive never even seen the card yet they expect me to pay it and its been over 7 years now on this one . It was used for Auto parts in Nevada under my maiden last name?????
Credit card companies don’t make you pay the balance unless you waited too long to say it was fraud. They also wouldn’t report that. I feel like we are missing a part of this story.