There are lots of searches over the internet on how to improve your credit score, immediately, by 100 points, in 30 days and there are tons of articles here and there. People normally look for following in particular. Are you one of them?
Everyone should know what makes up your Credit Score.
If you are thinking for a fast track solution do know these three thumb rules.
Do you need to pay a credit repair company to increase their score? – No
Will getting married help raising their credit score? – No
Will doing on-time payments every month give their Credit Score a boost? – Yes
How to start improving your credit report?
Well, the first thing you want to do is get a copy of your Credit Report. Three major credit reporting companies do give you one free credit report per year, so plan to order one each quarter & start working on the following points as soon as possible.
1. Erase the Dents
Erase your old disputes, the negative information on your credit history, Once it’s marked it normally stays for seven years if not updated by Lender or challenged by you. The best approach is to contest any such records that are incorrect or a result of identity confusion or other manual mistakes.
2. Pay off your debt
Paying off debt is the best way to do make the denominator of your credit utilization ratio bigger, it’s time to focus on making the numerator smaller. By lowering your total debt owed, you lower the total amount of interest you pay.
3. Negotiate
If you had stopped paying credit card bills in past, do try to negotiate with your creditor now. Write a letter offering to pay the remaining balance if the creditor agrees to mark the account as “paid as agreed” or erase it altogether. (Note: Visit a branch and get the creditor to agree in writing before you make any payment.)
4. Get a credit card.
It seems simple, but then you start a new line of credit. Once you start using it and paying back in time, you are making a good line of credit which would help nullify the bad credit score. Having credit cards will do good things for you.
5. Raise your credit limit.
Increasing your credit line will develop your credit utilization ratio, which is the percentage of your credit limit you’ve used in a month, and help to improve your credit score. Do request your creditor to increase your Credit limit, i.e. upgrading the limit of your Mastercard/Visa up to $2,000. Be it’s a double edge sword. Don’t increase your spending habits accordingly.
Don’t use more than 50% of your credit limit. Few credit card companies give you the option to request a credit line increase without a credit inquiry. If it is so then take it. If they want you to furnish additional information and plan to pull-up your credit report then do cancel the application, because a tough credit check will hurt your score.
6. Charge Less.
The credit takes your Credit card’s statement’s closing balance, even if you pay it in full that same period. If you want to give your Credit score a boost, use your credit cards less and lower your statement balances.
7. Pay On Time – Don’t be late.
Making on-time payments every month is key to staying on top of your debt and maintaining your score. It sounds odd but improve your credit score.
8. Patience is the Key.
If you have dark marks on your credit history, if you’ve filed for bankruptcy, it will take years to get you back in the game. In best cases, it takes about 7 to 10 years to erase the negative effects of a bankruptcy filing from a Credit Report.
9. Don’t become an Identity Theft Victim.
If a thief steals your identity and starts creating new accounts and building up debt in your name your credit scores can be ruined quickly. Do review your account statements carefully each month to spot any errors and alert immediately to your card issuer if you see any problems.
10. Maintain Accounts in your name.
If you are unemployed or College students and use someone else’s with accounts it’s time to set up some accounts in your name. That will help you start building your credit history. Accounts with monthly bills, utilities, or credit card bills would help fill out your credit history.
Conclusion: Like every good thing, the Credit Score building takes time, there is No fast lane of getting it done within a month. But over six months to one year, if you follow the ten points we have discussed, you can see a positive impact on your score.
All the best.