Do you have a credit score that is not so impressive or a credit history that must improve? If you don’t have a copy yet, you can get your credit report and score for free. Credit scores dictate how our financial lives go. It could even go as far as saving us thousands of dollars. A good credit score can get you the best payment terms and interest rates in loans. In fact a discrepancy of 4% in interest rates is what separates an excellent credit score from a risky one.
So how do you improve your credit score quick? Unfortunately, there is no quick fix here. The fastest that you’ll see a difference is a month and that won’t even be a dramatic change. You see, credit reports and scores is a compilation of your credit history so no matter how well you do now, a not so ideal past will not be erased unless it occurred seven years ago. Improving your credit score is not an instant fix. It will take practice and habit.
Below is a list on how to improve your credit score fast at least as fast as possible.
- Credit balance and credit limit ratio
If your credit card limit is $10,000 and your credit balance is $8,000, this is one of the factors that is bringing your score down. The less of your credit limit that you use up, the better. If you can, bring your balance down to 10% of your limit. If you have gotten a credit increase recently, make sure that your credit report is updated too.
2. Pay it off
Along with your credit card, do you have other existing credit such as loans? Having a big credit is affecting your score so pay it down. If you can, it would even be best to pay it all off.
3. Check for errors
Errors in the credit report are quite common. Make sure that no error is on your report because it just might be dragging your score down. Make sure the credit limits, the payment dates and all other figures are correct. Unfavorable credit activities that you did not make yourself should not be affecting your record so be sure to request a credit report dispute. This is also the time to detect identity fraud and stop it before it escalates.
4. Pay on time
Your efficiency in paying your bills takes up the most percentage in your credit score. It accounts for 35% of the overall score. So if you have missed payments in the past, your credit score will inevitably be affected. Make sure that this does not happen again. If your credit report shows a late payment when you actually paid for it in time, take all necessary actions to fix any inaccuracies.
5. Keep it active
Do you have a credit card that you have had for years that you no longer use? Do not ever think of getting rid of it because keeping a credit card can help improve your credit score. It would do your credit score good if you keep that credit card active. You do not necessarily have to make big purchases to do that, small items that you can pay in full at the end of the month is ideal.