Those looking to build their credit score in a hurry probably already have an appreciation of how difficult and drawn-out building a good score is. It’s also fairly likely that they are all too familiar with how quick and easy it is for a credit score to sink like a stone.
While excellent credit takes time to build, there are measures you can take starting today to boost your score by 30, 50 and even 100 points within a couple of months. Here are some things that can help.
- Know What Your Credit Score Is
The first and most important step toward boosting your credit in both the short and long-term is by getting a full account of all your credit histories. This can also be the most daunting and confusing task because there are a lot of agencies and companies that track your credit—and even more services that will charge you for the privilege of accessing that information.
Unfortunately, there is only one way of checking all of your various scores without any cost or risk of impacting your credit. Once a year, you can request a comprehensive credit report from all three agencies via AnnualCreditReport.com. While credit card holders can usually request a free FICO report from their associated bank, this is not always the case and may not include you score from all three reporting agencies.
- Dispute and Resolve Any Errors
The first thing you should address after you’ve received your credit reports is to dispute any and all incorrect or inaccurate blemishes to your credit history. These errors are more common than you might think; these agencies are far from perfect.
If you do find any inaccurate or suspicious entries on your reports, contact the relevant agency immediately. Provide the agency in writing with a full account of the disputed entry as well as any facts that would prove that they are inaccurate or completely false. Be prepared to contact the provider of the faulty information with whatever evidence you have that shows the charge to be incorrect or fraudulent.
The credit agency is required to investigate the dispute within 30 days and, while it’s not guaranteed to resolve in your favor, it must update you on any changes to your credit report. To get a full rundown on the dispute process, check with the Federal Trade Commission’s page on credit history disputes.
- Pay Down Your Outstanding Debts
Once you know your credit score and history legitimately reflect your own accounting, you can begin taking steps toward improving it. Start by resolving any outstanding debts, beginning with more recent balances.
The ideal outcome here is to completely resolve any and all debt you might be carrying, which could easily increase your score by 20-50 points overnight, depending on your score. However for most people trying to increase their credit score, this simply isn’t feasible.
If paying down your debt isn’t so simple, it’s best to focus on debts incurred within the past three years, as paying those down will have the most substantial positive impact on your scores in the near-term. Older debt, while still being a drag on your score and eventually worth addressing, won’t have as great of an influence once it’s gone.
- Maximize Your Credit Limit, But Keep Your Balance Below 30%
If you can manage it, try to maximize your credit limit on all of your existing credit lines. From there, attempt to push your outstanding credit to below 30%. While not perfect, this is the generally accepted threshold for a healthy line of credit. From there, you can work toward paying down your biggest balances first to cut down on interest payments.
While working toward paying down these accounts, it’s important to keep in mind that even though credit agencies like to see you pay back debt, they really like seeing you create new debt. Don’t feel you have to neglect using credit while you are paying down debt. An inactive line of credit may eventually be eliminated from your record, which means all the good credit you built up goes with it. The goal in building credit is establishing balance and maintaining control.
- Consolidate Debt And Lines Of Credit
Along the lines of simultaneously creating and eliminating debt, you should also attempt the balancing act of eliminating outsized debt while maintaining a sustainable number of credit accounts.
This first strategy of consolidation involves borrowing money and moving some or all of your debt from your credit accounts to a single loan. This will have an almost immediate effect on your credit score, but is only advisable if the interest rate on the loan is at or below the total interest of the credit accounts and you have a concrete means of meeting the loan repayment schedule.
The latter part of the equation is simply a matter of identifying how many credit accounts you actually need. Generally, this culling of credit will involve choosing two or three of your preferred credit cards, those with the longest history and most favorable interest rates, and designating specific uses for them.
For those cards that don’t make the cut, you might want to consider shredding them unless they carry high fees, in which case you should cancel them. While closing lines of credit isn’t ideal, as it will decrease the overall amount of credit you have available to you, there’s no point in dealing with high fees for something you’ll never use.
- Pay Your Debt, On Time and In Full
Finally, it’s important to restate that, while these tactics will help add a few extra points to your credit score, excellent credit can only be built over time and with diligence. The best tactic for improving your credit for good is to never miss a payment and eliminate any short term debt as quickly as possible.
Zebit is here for everyone.
Zebit is great because we have members with both good and no-so-good credit histories. That’s because we never perform credit checks. If you don’t have access to credit or prefer not to use it, you can make your Zebit payments with a debit card. If you are trying to rebuild your credit, you can make your payments with a credit card. We recommend enrolling in auto-pay so you stay on track and never miss a payment. Plus, with regular credit card usage and good payoff performance, as mentioned in step 4, you can leverage Zebit for building your credit.
It may seem daunting at first, but you can do it! Zebit is here to help.