It may sound like a miracle to raise the credit score from 650 to 750 in four months, but it is achievable if you make the right changes to your financial behavior. Any score above 750 is good, and you will get the best interest rates when applying for any loan or credit card. Below is a breakdown of the possible actions you can take to help you achieve the goal of getting a score of 750 in 4 months.
Month 1: Analyze Your Credit Reports and Look for Discrepancies
The first thing that needs to be done is to review the credit reports of Equifax, Experian, and TransUnion and query anything that has been deemed to be wrong. Some of the reasons why your score may have dropped off include wrong details such as accounts belonging to other people, wrong balance, and other errors. Challenge the errors with the credit bureaus, and they have one month by law to investigate. This can give you a quick way of improving your score in that particular area.
Also, check the reports frequently and look for any accurate adverse information that is about seven years and seven months old so that it can be removed. A year from now, you do not have to trouble yourself with those again.
Month 2: Target to Pay Down Revolving Balances
The second biggest driver of credit score is the utilization of credit ratio. This is the measure of the amount of outstanding credit on revolving credit accounts to the total credit limit which can include credit cards. It is advised that this should be below 30% and the lower the better for the competitiveness of the loans. To increase this ratio quickly, the best idea is to pay down credit cards and other types of revolving loans. Furthermore, do not use these accounts to make purchases that will have a high limit until you check the score after 4 months.
Month 3: Pay off credit card balances and become an Authorized User
If there is a person in your immediate circle who has a credit card that has been active for a long time and possesses a good track record, try to talk them into making you an authorized user of the card. This puts you in a position of having high credit reports from the relative account history without the detriment of having to pay up their balances. Ensure they have little balance outstanding on the credit cards before adding you.
Month 4: Reduce use of credit cards
If one fills in a new credit application it leads to a hard credit inquiry and leads to a drop in scores by a few points. It also helps to lower the average age of your credit history, which is one of the components of credit scores. In step 4, ensure that you do not apply for any new credit cards and loans for the next 4 months in a bid to reverse the efforts you made in steps 1-3. By the end of month 4, you should be clear to go for new credit where it is necessary.
The results of the quiz must be revised after 4 months of learning
Make sure you strictly adhere to this plan for each of the 4 months as planned above. Lastly, it is advisable to check your credit score. Hopefully, your score should have been taken up to 750, provided there were no negative pieces of information that came up as a surprise to you. This puts you in good standing to be offered credit products with the best features the market has to offer. This is where it pays to keep your credit score in check and make responsible credit decisions from here on so that you can in turn enjoy those privileges.
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