If you’re planning on buying a home, getting a new car, or finding a new apartment, you better have a strong credit score. Otherwise, you may get denied.
But what if your score is bad? Are you out of luck? No! That is simply a myth.
Luckily, there are some great strategies you can use to quickly improve your score. Check out the tips we’ve gathered to help you with fast credit repair.
Check Your Reports
You’ve got to know where you stand before you can make a change. So start your fast credit repair process by seeing where your credit score currently stands.
You are entitled to one free report each year from the three major credit reporting companies. These are Equifax, Experian, and TransUnion. Once received, make sure you save them to your computer immediately or even print out a copy so you have them for your records.
Then get down to business. Examine every last detail. Especially check for any unpaid bills or late payments.
If any of the information is incorrect, dispute it. Each report will tell you where you can do so.
Once you’ve checked it out, remember that there are companies that will provide you with simple tasks you can do to improve your credit. One of the most reliable businesses is called CreditRepair.com. Check out this review to learn more about them.
Become an Authorized User
Sometimes called piggybacking, this is a great way to pull off a fast credit repair operation. Here are the details.
Becoming an authorized user simply means you are added to someone else’s credit card as a user, not the main cardholder. So if you have someone in your life who is very good at handling their finances, see if you can be added to their account as a user.
Explain to them that you are not going to use this credit card. But by simply having your name listed on their account, your credit score can rise.
This only works if the primary cardholder pays their credit card bills on time and has a good credit utilization rate. If not, it could actually damage your credit score.
Open a New Account
You might think, “Why in the world would I open another credit card if I can’t even keep my current ones in order?” The answer is simple.
One of the key factors that contribute to your overall credit score is your credit utilization rate. This is a ratio that is calculated based on all your balances and outstanding lines of credit.
Consider this scenario:
You owe $10,000 and have a credit limit of $15,000. If you can open a new account and increase your credit limit to $20,000, this lowers your overall credit utilization rate, which will help improve your score.
However, be careful to not open too many accounts at once. This can hurt your score. So if you are going to try this credit repair method, only open one or two new cards.
Lower Your Balance
Did you know that 30% of your FICO score calculation is based on the amount you owe? As mentioned earlier, it’s not just the amount you owe–it’s also about your credit utilization rate.
This simply means how much you owe compared to how much credit you have. It’s recommended to keep your utilization rate less than 30 percent.
If yours is higher, one the best things you can do is start paying off your balances. This is easier said than done, because what if you don’t have the money to do it?
Here are some ideas to make it happen:
- Set a stricter budget for yourself
- Eat out less or eliminate other frivolous spending
- Have a garage sale
These are just a few ways you could earn a little cash so you can pay off your balance more quickly.
Add Your Rent Information to Your Files
If you’re a renter and pay your rent on time, make this part of your credit score calculation.
This is a great hack to simulate fast credit repair. How come? It works quickly.
In fact, one TransUnion study found that 8 out of 10 renters saw an increase in their VantageScore just one month after reporting their rent payments.
Be aware that you will have to coordinate with your landlord to make this happen. You can’t do it on your own. They will need to verify your payments with a third party company that will then pass on the information to the credit bureaus.
But it’s definitely worth the hassle if you’re looking to quickly improve your score!
Another Tip for Fast Credit Repair: Change Your Payment Schedule
If you’re like most people, you probably pay off your credit card once a month.
While this can seem like the right thing to do, the issue is companies report balances to the credit bureaus only once a month as well. So if you use your card often and rack up a large balance every month, the credit bureaus might think you’re overusing your available credit.
Here’s why. Let’s say your credit card has a $3000 credit limit and you use it for almost all your purchases. By the end of your monthly cycle, you reach that limit.
Once you receive your statement, you send in a check or get online and pay your balance. But did you know your credit card company probably already reported the statement balance to the bureaus?
So if your limit is $3000 and your balance is also $3000, this means you have a credit utilization rate of 100%. This sends the message that you are not a very trustworthy consumer, even though you pay your whole balance every month.
This can be a very frustrating situation! That’s why you should pay your balance twice a month to decrease your utilization rate. Or consider paying your balance the day or two before your statement comes.
Both of these options will help you avoid this problem.
Now that you’ve read these tips for fast credit repair, it’s time to implement them.
Pick the ones that will work best for you and try them out!
Looking for money tips and tricks? Check out our financial blog.