Unless your credit score is a perfect 850, chances are you could use a boost on your credit score. Unfortunately for all of us, a few negative points on your report can significantly decrease your credit score, especially if you have a short credit history. Depending on what is pushing your score down, you may be able to see quick results in less time than you think.
According to Rod Griffin, director of public education at Experian, “the lower a person’s [credit] score is, the more likely they are to achieve a 100-point increase.” While there isn’t a magic solution to fix poor credit if your credit score is currently somewhere in the “fair” and “bad” areas, use the strategies in this article to improve your credit fast.
1. Make Sure Your Payments Are on Time
To ensure your credit score begins to improve, it is important to immediately make sure that all your payments are being made on time. Your on-time payment history is one of the most significant factors when it comes to your credit score. In fact, 35% of your FICO credit score is comprised of your credit payment history. Because of this, it is crucial for anyone hoping to have good credit to always make their payments on time.
To easily ensure that you never miss a payment, we recommend that you utilize auto-pay features by linking a bank or credit card to your bill provider. That way, should you forget that a bill is due, you’ll still have the necessary payment go through. As long as you maintain the appropriate balance in your account, you’ll never have to worry about missing a payment again.
It is important to note that only late payments of over 30 days are reported to credit bureaus. The later the payment, the harder it will negatively affect your credit score. However, because you have 30 days until the payment is reported, it is crucial that you rectify any late payments as soon as possible to prevent any negative impacts.
2. Begin Fixing Any Errors on Your Credit Repair
Even if you’ve made an effort to stay on top of your payments, there may be some errors on your credit report that can be negatively affecting your credit. In fact, it may be surprising, but credit reports aren’t always fully accurate, which is why it is crucial you take the time to review your reports at least twice a year.
For those looking to perform credit restoration, anyone can get a free credit report from the three major credit reporting agencies once a year. To get your free credit report, visit AnnualCreditReport.com to request a copy, or call 877-322-8228. During the ongoing COVID-19 pandemic, everyone is eligible for free weekly credit reports from each of the top three credit bureaus up until April 20, 2022.
Once you’ve had the chance to review your credit report, be sure to carefully pick out any errors and then report them online with whichever credit bureau issued the report. Removing issues on your credit file can ultimately make a large difference in your overall credit score. The faster you correct errors, the faster you can increase your credit score.
3. Pay Off Any Existing Debt
Credit utilization ratio, or the amount of credit that you are currently using divided by the total amount of revolving credit you have available, is also a large factor that influences your overall credit score.
When it comes to paying off existing debt, there are two methods that we recommend: the debt avalanche or the debt snowball method.
The debt avalanche method: With this method, the focus is placed on paying off any high-interest debt first, and then moving to the next high rate, and so on. While paying off debt using the debt avalanche method, be sure to continue making minimum payments on time for all other bills to prevent any penalties.
The debt snowball method: With this method, the focus is placed on paying off your smallest balances first then working up to the next, and so forth. This method is meant to build momentum and encouragement as you pay off one card at a time. Be sure to remember to continue making minimum payments on all of your cards.
4. Request a Credit Limit Increase
As previously mentioned, your credit utilization ratio is an influential factor when it comes to your credit score. While paying off your credit balance may be one way of reducing this ratio, you can also ask for a credit increase to help lower this ratio.
In order to request a credit increase, you’ll need to contact your card provider and they may run a credit check before approving the limit. If your credit is significantly low, this option may not be successful for you and we recommended taking caution as a credit check can knock off up to five points.
5. Become an Authorized User
Unbeknownst to most, being an authorized user on another person’s credit card is a favorable way to increase your credit score. Being an authorized user on a person’s credit card means that you have permission to use another’s account, which means you’ll be associated with all of the payments their providers report to the credit bureaus.
If a family member or a friend with good credit habits adds you to their account, their positive activity will then be reflected on your credit report. For people with a limited credit history, this is extremely beneficial.