Raising your credit score quickly is both possible, and actually quite easy, if you observe a set of personal finance rules. Doing this is no great feat, and has more to do with common sense and spending discipline rather than applying some financial magic. Below, we will share a few top tips on how to raise credit score fast in a reasonable period of time, without doing too much damage to your spending routine.
How To Raise Credit Score Fast – Practices to Avoid
Raising your credit score has tons to do with responsible spending behavior. As such, some things are simply a no-no. Always make sure you:
1. Don’t Exceed Your Credit Limit
Exceeding your credit limit is a red flag for creditors, as it indicates reckless and/or unsustainable spending. Steer well clear of your credit limit by keeping balances at no more than 30% of your credit limit. However, the lower the percentage, the better. In addition, make sure you pay the entire balance on a monthly basis. The main idea is to keep your outstanding debt as low as possible, which will significantly improve your credit score.
2. Don’t Spend More Than You Can Afford
Raise your credit score quickly by simply making rational, calculated, decisions regarding a purchase. The credit card goes hand in hand with a greater temptation to buy stuff and a sense of financial freedom. However, remember that you must pay it back. With interest, if you don’t do it on time. Keeping purchases under control will improve your credit balance and, consequently, your credit score will increase. Remember to exercise self-control when shopping.
3. Don’t Overuse Your Credit Cards
Only use credit cards when you really need them. Even if you can pay it back, excessive use of credit for day-to-day purchases is considered a risk factor by credit rating agencies, banks, and other financial institutions. Therefore, try to keep the credit card in reserve for really important purchases. This shows credit score companies and lenders that you are using credit responsibly and sustainably.
4. Don’t Snowball Debts
Getting more credit to pay off existing debt might work in some special circumstances. Nevertheless, it is generally considered a major red flag, which will severely affect your credit score. Besides being unable to borrow more, the cascading debt can have disastrous consequences on your quality of life. Always know when to stop borrowing and keep as little debt on the books as possible to improve your score.
5. Don’t Close Your Cards
Finally, you shouldn’t close any existing credit cards, as it will lower your available credit, which is considered a negative indicator. Keep your credit cards active by using them for regular expenses, such as electricity bills.
How To Raise Credit Score Fast – Recommended Practices
By contrast, there are other things which you should always do if you’re going to move the credit score upwards quickly. The actual time in which your credit score will vary in accordance with your previous payment history, your credit balance and your credit utilization. Here are some key things you should do in order to raise your credit score:
1. Always Pay Your Bills On Time
Improve your credit score fast by paying your bills on time. All of them. Always. Your payment history counts for more than one-third of your credit score, and any late bills will take a heavy toll. Make paying all bills on time a top priority, due to the very important part his plays in determining your credit score.
2. Always Stay Informed And Organized
Improving your credit score might be about keeping a healthy balance on your card and spending wisely. But that’s the macro level. The micro level is equally important, and without it, you simply have no chance of escaping a bad credit score loop. As such, always stay informed with regard to all your creditor’s terms, conditions, and agreements which concern you. In addition, keep all your files and documents in good order. This counts enormously when getting yourself ready to take the necessary steps for improving your credit status.
3. Check For Errors And Report Them
Sometimes, your credit score might decrease due to an error in the reporting system, such as a payment which wasn’t processed correctly. If you suspect your credit score was unfairly lowered, reporting the issue to your lender is the first logical step. Note that creditors and credit rating agencies do not search for such errors and it is your responsibility to check and report. Read more about how to keep your credit record clean. Once such errors are dealt with, your credit score will rapidly improve. Just remember that it is you who should provide the first input in this regard.
4. Use an Endorser
If your credit score is low, one option is to get a relative or a friend to vouch for you. More than that, you can ask them to become an authorized user for a credit account they own. This will provide an additional guarantee to credit rating agencies and lenders and will contribute significantly to improving your credit score. If you feel this is a viable option, do not forget to provide a written statement of how you plan on using this credit facility, which provides extra credibility.
5. Negotiate Customized Agreements
Sometimes our credit score gets lowered not because of irresponsible borrowing and spending, but due to unforeseen circumstances, such as a temporary period of unemployment and/or financial difficulty. Write a letter to your creditor and ask that your outstanding amounts be moved into a new timeframe. This will give lenders the confidence that you are serious about handling future payments responsibly and it will also raise your credit score quickly, as your debt enters a state of “normality”.
Different Types of Credit Scores
When considering how to raise credit score fast, it’s worth remembering that credit scores are not universal. The most common scoring method in the United States is provided by FICO, who provides lenders with credit scores. In their case, credit scores normally range between 300 (very poor) and 850 (very good). Though FICO’s algorithm is currently the most popular, there are also other rating companies on the rise, such as VantageScore.
For you, this means that determining which rating company your lender uses is important, as is sticking to the same credit score company and credit score version. The scores they provide can be different, and each will affect your ability to borrow in a different fashion.
How to Raise Credit Score Fast? – It’s Quite Easy After All
All in all, don’t think about how to raise credit score fast if you’re not willing to make a few sacrifices and cut spending. The above tips will work if you are committed to restoring discipline in your finances, and this often means that you’ll have to cut back for a while. However, once you get everything in good order, you will have easier access to future loans. Raising your credit score quickly is really not that hard if you’re able and willing to make the right choices.