How to Raise Your Credit Score 50 Points in the Next 45 Days
An individual needs to have a good credit rating to avail loans and credit cards besides other forms of credit. It also makes it possible to obtain a lower interest on the loan, meaning that you use less money to pay the loan. You may be surprised to know that, though it is not easy, it is feasible to bring the credit score up by 50 points or more than that. Below are some of the most useful tips that can be used to increase your credit score within a short period.
Pay Down Revolving Debt The most important aspect of your credit score is your credit utilization ratio, which is the money you owe, divided by your total credit limits. It is important to keep this below 30% according to the majority of financial professionals. Thus, if you have high credit card balances and balances on other types of revolving credit, paying this amount can help you improve your score rapidly. Thus, the basic steps of paying off balances so that your utilization is less than 30% of your total credit limit can increase your score significantly in a short time.
Become an Authorized User While you should not use someone else’s credit card to make purchases, you can become an authorized user of one of the credit card accounts belonging to a family member or friend with good credit and a long history of on-time payments. This will assist them to have a positive credit history to be reported on your credit files. When you add account activity from an authorized user status to your credit profile, ensure that you do so with the credit-worthy candidate. An authorized user usually does not get a physical card or make any changes to the account on their own. What they all want is for their positive history to be incorporated into the report.
Disputing mistakes on an individual credit report As much as a third of the population has an error on their credit report - one survey indicated errors on 72% of reports. Ensure you have gone through your credit reports carefully and if there is any information in the reports that is erroneous or missing, then you should report the whole issue to the credit bureaus immediately. The method of challenging and eliminating undesirable entries can significantly improve your score. Do not forget that you are bound to supply the organization with proof that the entries are indeed incorrect.
Limit New Credit Applications, if one applies for several new credit accounts at the same time, this may negatively affect your credit score. That is because the number of credit inquiries within the past sixty days, which also forms part of credit scoring models, is a factor that is considered. This means more risk and lenders consider you a high-risk borrower, meaning they are likely to charge high interest rates or reject your application. Do not open many accounts and apply for credit cards or loans simultaneously within a short period, if possible at all. If the number of new accounts and hard inquiries exceeds a reasonable limit, most of the scoring models will pull down your score.
Secured Cards are the best if used in rebuilding the credit score of a person. If the credit score is very poor or if the credit history is quite limited, there is nothing as effective as a secured credit card to help rebuild the credit quickly. A secured card provides an opportunity to obtain a credit line that is often equal to the amount of cash deposit you provide. It is then debited and charged like any other card and all charges and payments are with the credit bureaus. So, just to sum up, remember to always pay all your credit card statements on or before the due date, so that nothing negative gets reported about you. In approximately 6-12 months of proper usage of this card, one may be able to request for the card to be upgraded to a regular unsecured card, and of course, with the rise in the credit score.
Outlining Steps to Take in Case of Reporting Errors If you have tried to use the dispute letters to the credit bureaus to correct the entries in your reports, and you did not get the response that you wanted, then do not despair. Sometimes errors go unnoticed or are not corrected, as paperwork may slip through the cracks. Telephone the department and send further letters, as well as any relevant enclosures, until the disputes are properly dealt with. To the best of your ability, it is necessary to give as many reasons as possible to prove you think the information is not correct. This is because the credit bureaus are legally obliged to respond to any errors that have been contested, and this normally takes between 30 to 45 days. Whether it is a science project or a business venture, one must work hard until it yields a positive outcome. Given this effort, the credit score can be increased significantly.
Thus, by following these five fast credit repair tips, you will need less time to see the changes in your credit history. Learning how to discharge balances, check for mistakes, deal with inquiries, and obtain fresh secured credit cards will help one raise their credit score between 50 to 100 points and even more within the space of three months. However, sustainable vitality is crucial for the long-term process – once you see that your score is gradually increasing, try to keep up with the positive habits that help it go up.
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