14 Tips to Improve Your Credit Score Fast
Here at DetroitHarmonie.com, we know how difficult it can be to manage your finances properly. We also know it can be tough to get a loan, mortgage or contract without having a decent credit score. Even if your credit score allows you to take out a small loan, this guide will give you ways to improve it, maximising your chances of getting better loans and deals. While there are things that you can do to improve your credit score over a longer period of time, not everybody has a few years to spare. Here are some of the things that you can do if you're trying to get a better credit rating fast.
1. Get a credit card and make payments
If your credit rating is very poor, you'll struggle to get a credit card. However, you might be able to bag one with your bank or other companies which might be less strict about requirements. If you want to improve your credit score fast, the important part here is to make the payments. Once you manage to get a credit card, ensure you make the payments. Making payments on time every month on your credit card will ensure that your score soon goes shooting up and puts you in a better position financially.
2. Don't use your credit cards too much
While we're on the subject of credit cards, it's worth noting that it's never a good idea to max them out every month, even if you manage to pay every penny back on time and in full. Credit bureaus will only look at the large amounts that you're spending and believe you to be immature and out of control when it comes to spending. Experts recommend never spending more than 30% of your credit limit, and in an ideal world, much less than that.
3. Pay everything on time
Make a point of always paying everything on time. Late payments can really damage your reputation, and consequently, your credit score. In fact, your credit score is made up of a few different things, but 35% of the score is based on your payment history. Any late or missed payments will bring your credit rating crashing down and could cause lasting damage if you continue paying late.
4. Keep your cards and accounts
Don't bother closing credit card accounts unless you're having terrible trouble resisting the temptation of spending all the time. Your available credit will drop if you close a card, which doesn't look good. Remember that you can pay bills using your credit card, so if you can't think of a way to keep it open, transfer one of your bills to be paid on the credit card. This can be done very simply by contacting your provider and asking to change the way that you pay the bill each month.
However, it's important to note that having lots of different credit cards lying around can have a bad impact, so try to keep one or two which you've had the longest or which you've managed to pay off consistently for a while.
5. Transfer your balance
Get a new credit card which offers 0% interest for an introductory period. Apart from making it a lot easier for you to pay off your debts, the new credit card may have a greater limit, which means you won't be using up as large a percentage as you were on the old card. Transferring the balance of one credit card or debt onto another credit card is a popular way of making debts more manageable, and if your credit score isn't horrifically bad, there's a good chance you could take out another.
6. Look for errors
Get a copy of your credit report for free from www.annualcreditreport.com and look through it to see if there are any errors. If you feel way out of your depth when it comes to finances and hunting down errors on your report, there are credit repair companies who can take care of this for you. It could be the case that your credit score is low because of errors, and getting these sorted out will instantly improve your rating. You'd be surprised at the small mistakes which can affect your credit score. Don't think that errors don't occur in the credit world, since many people have been victims of this in the past. You're likely to be a victim of errors on your credit report if you can't think of anything which could have gone wrong with your finances. You can get a copy of your credit report every year and keep up to date with potential mistakes.
7. Pay off your debts
You need a lot of money to do this if you have a lot of debt, but one of the best ways to get a better credit score quickly is to get yourself out of debt. If you only have a small amount on your credit cards, it's worth using some personal savings to pay this off. You could also ask a friend or family member to lend you some money so that you can pay off your debts. Loans borrowed from family and friends won't count towards your credit score, but finding somebody generous enough to lend you some cash could be difficult.
8. Increase your limit
You've got a good chance of having some luck with this if you'd paid your debts on time and haven't constantly maxed out your credit card for years. Phone your credit card company and ask them if an increase is available to you. However, don't spend the extra which is available to you. By having a larger limit, you'll be using a smaller percentage of your available limit, which will look like you're managing your finances very well!
9. Use credit
There are some people who swear never to get into any debt, and as a result, this can make it very difficult to build up a credit history. If this sounds like you and you've been refused a loan or mortgage, it might be time to think about taking out a credit card. You don't have to go crazy with your new credit card – it's good enough to simply make a small purchase every once in a while. You can even ask your bank to set up a direct debit to pay the credit card off automatically each month, ensuring that you never miss any payments and have to pay interest.
10. Other bills are important too
If you don't pay your bills, they'll be sent to a debt agency or collection agency, and this could be sat on your report for years. Just because it's not a credit card doesn't mean that you can afford to miss a few payments here and there. Missing utility bills and other payments which you need to make will be recorded, and if you've never had a credit card or other loan which can show your reliability when paying off debts, the credit bureau will turn to your other bills. If you've missed any of these or made late payments, it won't look very good at all.
11. Shop around quickly
Each time you apply for a new loan or credit card, your credit score will be shown to the lender. Making lots of enquiries and sending in lots of applications will cause your credit score to decrease, unfortunately. While you might consider this to be unfair, you need to take it into consideration when looking for a new loan. Research each loan carefully before applying, and only choose the ones that you really want or that you believe you have a good chance of being accepted for. Apply to the ones you're interested in within a few days, rather than making it a long and drawn-out process over a number of weeks or months.
12. Don't pay the minimum
Don't pay the minimum – pay over the minimum. This can increase your credit score and give you a better reputation in the world of finance. Apart from paying your debts off much quicker, you'll get yourself a better name with your creditors and could even be more likely to get better deals or an increase in your credit limit.
13. A good mix is important
Wherever possible, have a good mix of credit in your history. Don't only ever have credit cards – take out a mortgage, pay your bills on time and get an auto loan if you want to buy a brand new car. The secret here is budgeting and making sure that you always have enough income to pay off all the debts that you have. By doing so, you'll ensure that your credit score is able to get as high as possible.
14. Open and close a credit account
It's perfectly possible to open and close a credit account within the same day, and this is something which people have actually done in order to quickly improve their credit scores. Take out a credit card, make a purchase, pay it off and then close the account. Job done!
Do you have a low credit score but need cash urgently? Are you wondering how you can get your hands on some emergency funds? Get in touch with us today and apply!Get Started!