Although it seems impossible to raise one's credit score by one hundred points in one month, with enough work and organization one can do it. Having a strong credit score is very vital as it draws better chances of acceptance for a mortgage or auto loan, attracts favorable interest rates when applying for a loan or credit card, and also results in reduced insurance prices. This 30-day schedule will enable you to maximize the good effects on your credit score.
Week 1: Credit Reports & Errors: It is important to review credit reports and correct any errors found
The first and most significant procedure is to obtain your credit reports by visiting AnnualCreditReport. com because it is the only officially endorsed website for free credit reports. Invest time and go through each report with keen attention to identify any issues of inaccuracy, error, or outdated information that may have pulled down the score. Such errors may include the following; some accounts are closed and listed as open, there is information on wrong balances, there are accounts that belong to other people, and there is information on negative items that are older than seven years.
If you can identify any problems with your credit files, submit formal disputes with Equifax, Experian, and TransUnion. If they are allegations that you can counter then make sure you support them with documents such as bank statements, receipts, or any other evidence that will give merit to your side of the story. This can help increase your score fast, within 30 days or less in some instances as mentioned earlier.
Week 2: Use twenty percent of the total money saved monthly to pay revolving balances
This is the second greatest factor influencing your credit scores after your payment history, and it has to do with your credit utilization rate. This is what is referred to as the credit utilization ratio. It is good to observe that this should be below 30%, and the less the better for your scores.
Please look at the credit card balance and credit limits that are available for the customers. Try to make payments to bring down balances, particularly if one or more cards are used more than 30%. It can make them rise to 10-20% and this can bring a quick increase. Money that can be gathered from other sources such as tax refunds, bonuses, or even by easing expenses in other areas will do good here.
Week 3: Becoming an authorized user
One of the simplest credit score tricks for improving your credit score is to find a relative who is willing to make you an authorized user of their credit cards. payment history of the primary cardholder gets reported in your credit reports once you are an authorized user, which in turn can improve your score greatly. Make sure they have a superlative payment history and a low chance of utilization for optimum effect.
Not even a card is needed to take advantage of this – though it helps if one is attached to the place. It can be just associated with a positive history which is good for credit reports and FICO Scores. When there is the opportunity to have an old account with a perfect history, it could be a major plus.
Week 4: Reduce The Number of Credit Cards Applied For
One final tip – refrain from applying for credit, which will be reported in the credit bureau, in the month of loan or mortgage approval. Each time you apply for credit, your credit reports get pulled and hence your scores dip marginally, having more than one new credit account opened at a time is not the best thing as per credit report standards.
As for the negative actions: just avoid them, make an effort to limit inquiries and your credit scores should soar in a few months just when you’re preparing for the loan approval. Check your scores and progress every week at Credit. com or through your credit card companies to be sure your plan is effective. If your score is not improving then it may mean that you need to correct something that you have overlooked or close other new cards that you are using that are adding to your credit utilization ratio.
For anyone willing to dedicate a month or so to the process, an improvement of a credit score of 100 points or so can be achieved without paying for it. This second chance is a chance to qualify for the best rates for lending as well as insuring in the many following years.
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