9 Ways to Improve Your Credit Score in a Month
You may have something on the horizon where you need a good credit score. Perhaps you intend to buy a house in the near future and don’t want to pay high interest rates due to shaky credit. We always tell people to track your credit score regularly and we’ve spoken before about how to improve your credit score. Building a good credit score is something you do over a course of years for really good credit that lasts.
But can you do anything to impact your credit score in a month or two? You betcha. The trick is to do as many things as you possibly can to eek that score up. The good news for those with shaky credit is that if your credit is bad or even fair, you can improve it more quickly than if you have good credit, maybe even as much as a 100 points very quickly.
Before We Start: You Won’t Get Anywhere if You Don’t Pay on Time
It should be a no-brainer that nothing is going to raise your credit score quickly if you pay your bills late. Payment history indicates whether you pay your bills on time, and if not, just how late you pay them. It’s the most important thing that impacts your credit score. When you pay late, that can follow you for years.
On the upside, if you change your evil ways and start paying on time every month, you can do some damage control and eventually your credit will improve.
So, if you are trying to improve your credit score quickly, at the very least you have to pay on time.
1. Dispute Mistakes on Your Credit Report
Few people like to pore over their credit reports, but you really need to keep tabs on them. Errors on credit reports are not uncommon and can adversely affect your score, sometimes by quite a lot. Getting a mistake corrected can make a big difference. Finding and correcting mistakes on your credit report is one of the fastest ways to improve your credit score.
Credit bureaus have 30 days to respond to you when you dispute a mistake.
2. Take Advantage of Close Connections
One way to improve your credit score a lot almost overnight is by taking advantage of the good credit of a family member or close friend.
For example, you could ask a parent to add you to one their credit card accounts. That doesn’t mean they need to hand you a card to do as you will. You don’t need to ever see the card or the account number. It means they add you as an authorized user on the card.
This can decrease the percentage of your credit utilization and also magically bestow a longer credit history. This is going to have the biggest impact if you have such a thin credit file that there’s really not enough there to even give you a credit score.
You can ask anyone to help you out in this way, but let’s face it, you probably only have a small circle who will be willing to do so.
But heed this word of caution. If your authorized user’ credit score goes down due to late payment or other reasons, it can cause your credit score to plummet. The good news is that you aren’t the one who has to pay the bill, if you ask the credit bureau to remove it from your credit report, they will comply. But you may need to file a dispute.
3. Pay as Often as You Can
You don’t have to wait until a payment is due to put something toward it. If you put money toward your bills several times per month, it can go a long way to improving your credit utilization.
Credit utilization is percentage of your available credit that you use. It’s the most important factor in your credit history after payment history. So as money comes in throughout the month, start paying on those looming bills.
4. Try to Increase Credit Limits
Paying down debt is not the only way to improve your credit utilization. Since it’s the percentage of your available credit that you use, you can also approach this at the other end. In other words, if you ask and get higher credit limits, it’s going to improve your credit utilization.
But here’s the thing. When you ask for a higher credit limit on a card for example, you do not want the credit card company to make a hard credit inquiry. A hard credit inquiry can decrease your score at least in the short term. A soft credit inquiry, one you make yourself, does not affect your credit score.
5. Make a Large Payment
If you have the money and want to improve your credit score quickly, make a large payment. Your credit score is impacted heavily by how much you owe in comparison to your income.
6. Don’t Rush to Close Unused Cards
If you are trying to improve your credit score, it may intuitively seem that closing credit card accounts you rarely use may be a good idea. Don’t.
Remember how we discussed that an important factor of your credit score is credit utilization. When you close an account, you have less available credit, which means the percentage of the available credit you have becomes less. This can adversely affect your credit score.
7. Have Diverse Types of Credit
Having diverse types of credit can improve your credit score because it shows you can handle both revolving credit such as credit cards and installment credit such loans or a mortgage. But be careful here. Credit mix is not as important as paying your bills on time and credit utilization. Keep in mind that when you apply for credit, the lender will make a hard credit inquiry. If you have too many hard credit inquiries in a short amount of time, it can adversely affect your credit score.
8. Use a Secured Credit Card if It’s All You Can Get
If you haven’t established credit yet or your credit is so bad that you can’t get a credit card, you may find yourself in a chicken and egg situation. How can you build or rebuild credit if you can’t get any? One way to build credit is to get a secured credit card.
With a secured credit card, you pay on the card in advance. In other words, your credit limit is the same as the amount you have paid in most cases. If you pay on time, a secured credit card can help you build credit.
9. Send a Goodwill Adjustment Letter
If you have a pretty good credit record but have that one thing you would like to remove, perhaps a late payment, it may be possible. Call or creditor, or if that doesn’t work, send a Goodwill Adjustment Letter and ask them to overlook your transgression. Try to do this before it hits your credit report if possible.
Call Us If You Can’t Get Your Finances Are Out of Control
If you need help disputing a credit report in order to improve your credit score or defending against debt collection, call us at Ziegler Diamond Law: Debt Fighters for a free consultation for a free consultation. Submit this form or just call us directly at (727) 538-4188 in Clearwater, (813) 225-3111 in Tampa or (352) 600-1326 in Mt. Dora.