If your credit score is lower than you would like it to be, there may be quick ways to get it up. Depending on what keeps it low, you can get up to 100 points relatively quickly.
Scores in the “Good” and “bad” spots of the credit scale could show dramatic outcomes – which could lead to better access to loans or credit cards and better terms.
Here are a couple of strategies to rapidly improve or rebuild your profile:
- Pay Bills On Time!
No strategy to enhance your credit score will be effective if you cannot pay on time. Why? Payment history is the biggest factor influencing credit score, and late payments can remain on your credit reports for seven years.
If you miss a payment by 30 days or more, call the lender immediately. Arrange to pay if you can and ask if the lender is considering not reporting the missed payment to the credit bureaus.
Even if the creditor will not do so, it is worth upgrading the account ASAP. Each month that an account is marked as delinquent will harm your score. Fortunately, the effects of a missed payment fade over time. Showing many positive credit behaviors after a misstep can help to compensate for the damage more quickly and ultimately improve your credit score.
If you are simply unable to pay everything on time, you should prioritize your bills. Look at the financial help offered in response to the coronavirus pandemic.
- Make Frequent Payments
If you can make small payments – often referred to as micro-payments – during the month, this can help keep your credit card balances low and improve your credit rating. Multiple payments throughout the month shift the needle to a credit score factor called credit utilization. According to payment history, this is another factor that greatly influences your score.
If you can keep your utilization low instead of building it towards a payment due date, your score should benefit immediately.
- Calling For Higher Credit Limits
If your credit limit increases and your balance stays the same, your overall credit utilization immediately decreases, which can improve your credit score. Call the issuer of your credit card and ask if you can get a big limit without a “hard” credit inquiry, which can temporarily reduce your score by a few points. If your income has increased or you have added more years of positive credit experience, you have a good chance of getting a higher limit. A few issuers may also be willing to work with you during the crisis of COVID 19.
- Dispute Credit Report Errors
An error in one of your credit reports could drag your score down, and repairing it can help you improve your credit rating quickly.
Credit reference agencies have 30 days to investigate and respond to the errors. Some companies offer to dispute errors and improve your credit rating quickly, but be careful before choosing this option.
- Become an Authorized User
If you have a relative or friend who has a long history of responsible credit card use and a high credit limit, you should ask yourself whether you can be accepted as an authorized user on one of these accounts. An account holder does not need to allow you to use the card – or even give you the account number – to improve your balance.
This works great if you have a bad credit file, and the impact can be important. It can refresh your credit file, give you longer credit history, and reduce your credit utilization.
- Use A Secure Credit Card
Another method that can be used to either build up the balance from scratch or improve your credit is to use a secured credit card. This type of card is backed by a cash deposit; you pay it in advance and the deposit amount usually matches your credit limit. You use it as a normal credit card, and your on-time payments help your balance. Choose a secured card that reports your credit activity to all three credit agencies. You can also consider looking into alternative credit cards that do not require a deposit.
- Keep Credit Cards Open
If you are racing to improve your credit profile. You should be aware that closing credit cards can make your work more difficult. Closing a credit card means that you lose the credit limit of that card when your total credit utilization is calculated, which can result in a lower score. Keep the card open and use it occasionally so that the issuer does not close it.
- Mix It Up
If you have just credit cards or just loans. Think about getting the kind of credit you don’t have to enhance your credit mix. Having both installment accounts and revolving credit, such as loans and credit cards, can boost your perceived credit score.