Here are 10 easy ways to improve your credit score fast.
1. Dispute Any Errors
It may be the case that you have a poor or average credit score as a result of mistakes on your credit record. If you know that to be the case, make sure you take steps to dispute those errors by contacting the credit bureaus with corrected information. There’s no reason you should be denied a loan or pay a higher interest rate because of somebody’s clerical error.
2. Negotiate
You can negotiate for almost anything. If your credit score is suffering because you went through a season of unemployment and couldn’t pay a credit card bill, write the company a letter stating that you’ll pay the balance if the company cancels the black mark on your record.
3. Stay Away from Your Limits
Your credit score might suffer if you’re always maxing out the limits on all your cards. If that’s the case, back off of those limits by paying down the balance while taking a break from using those cards. As a rule of thumb, it’s always best to stay below a 20% spending threshold on each of your credit cards.
4. Open a Credit Card
Part of your credit score is a measurement of how well you handle debt. If you don’t have a credit card, you’re limiting yourself on that metric. Pick up a credit card and pay it off each month and see your credit score rise.
5. Use Your Credit Cards Sparingly
If you do have credit cards, use them rarely. That way, you’re showing that you can manage debt and you aren’t someone who’s willing to splurge with borrowed money. A credit report is essential a gauge as to how risky it might be to lend you money – dispel any doubt of your ability to pay back a loan by showing a history of on-time payments and limited spending.
6. Increase Your Credit Limit
If you can trust yourself not to get too greedy with the extra money, ask your credit card companies to increase your credit limit. Again, if you don’t max out your card, you’ll find that you get rewarded with a better score.
7. Avoid Closing Cards
When you cancel a card, you cause your available credit score to drop because you are reducing the total available credit you have. To avoid adversely affecting your credit score, you can simply stop using your card or visit one of the many credit score estimators to get a sense of how much your score would drop if you do close out an account.
8. Variety Is the Spice of Life
You shouldn’t have all your debt in just one type of debt category. For example, all of your debt shouldn’t be in a mortgage, or in a car loan, or in credit cards.
If you only have one kind of debt, it’s likely your score will suffer. Diversify your debt by spreading it out among different types of loans.
9. Pay Bills on Time
The surest way to see your score drop is to let a creditor report you for a delinquent payment. On the other hand, if you want to raise your score, be sure to pay your bills on time.
10. Pay Bills Twice a Month
Pay your credit cards once before the due date and once again before the statement closing date. That way, you’ll be sure not to incur any late fees and you’ll be pulling down the principal a little faster.
Bad credit doesn’t have to last forever. With a little bit of sound financial management and some common sense, you can raise your credit score quickly and reap the rewards later on.
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