Most of us tend to care about our credit scores when we need to apply for an auto loan, a mortgage, or a personal loan. When you have a healthy credit score, lenders will let you borrow money at a more affordable rate.
If you are looking to fix your credit score quickly, here are some of the easiest and most effective ways to do so:
Check Your Score and Report
One of the best steps you can take to improving your credit score is to get your credit score and report. When you see your report, look for any negative entries that look incorrect. Over 1 in 5 Americans has an error in their credit report, so it’s vital that you check your score. If you find an error in your credit report, submit a dispute with the credit bureau right away. The credit bureau legally has only 30 days to respond. You can get free access to your credit score here.
Make Them an Offer They Can’t Refuse
If you have a delinquent account on your credit report that’s casting a shadow on your score, it’s time to clear it up. Find the creditor for the delinquent account and offer to pay off a portion of the balance in exchange for having it removed off your credit report.
Most creditors would rather have some money in their pocket rather than none. If the debt is already in collections, the chance of you getting it removed off your credit report becomes much harder unless there is an error in the report.
Most industry experts agree that consumers should only utilize about 30% of their available credit. If you are above this mark, ask your creditor for a higher credit limit. This, in turn, will reduce your utilization ratio which accounts for 30% of your total credit score. If you are unable to get a credit limit increase, be careful of putting future purchases on plastic.
Hop on Another Card
If you need a credit boost, becoming an authorized user on another person’s credit card is a sure fire way to increase your score. Essentially, you will ask a close family member or friend with good credit to be an authorized user on their account.
You do not even need to use the credit card the card company will mail you. As long as the main account manager pays their balances on time, you will experience an increase in your score. However, if this person begins to default and miss payments, that will hurt your score as well. It’s best to ensure that the person you get an authorized user account with has a history of on-time payments.
Rebuilding your credit from the ground up can be a daunting task, but the benefits of a healthy credit score are unmeasurable.