10 Simple Ways to Improve Your Credit Score Fast!

how to improve your credit score quickly

How to Improve Your Credit Score Quickly

No consumer wants to feel they’re just another number in the system. Unfortunately, this is exactly what we are in the financing industry – a credit score. If your credit history is blemished, then you need to know how to improve your credit score quickly.

An excellent credit score is 700+ and a poor rating is 659 and below. Almost 12% of the population has poor credit and almost 20% have a credit rating over 800.

sidewalk with you got this written out with chalk

Without a good credit score, it becomes difficult to buy a home, finance a brand new car or rent an apartment. It’s like you’ve been stamped with a symbol on your forehead that tells creditors to run for the hills.

You know you’re in trouble when your credit rating is beneath 760. At this point, you’re eliminated from the lottery for low-interest rates. Once it drops below 600 to 650, it gets harder to get approved for a loan.

This doesn’t have to be. If you have an average to below average credit rating, then continue reading to learn how to improve your credit score quickly!

Dispute Flaws On Your Credit Report

If you haven’t already, request your credit reports from all three credit agencies. Equifax, Experian, and Transunion will give you one free report annually. If you can pass the sometimes iffy questions, you can access your scores online.

Once you do, go over your credit report to see if there are any errors. This could be an account you never opened (identity theft) or an incorrect debt amount. If you paid off an account, but it’s still there, then it needs to be disputed.

You can create disputes with the three credit bureaus. The creditor has a certain time frame to respond or the account is removed from your credit report.

Make Payments Strategically

This is probably the most important tip for how to improve your credit score quickly.

Start paying off your debts as soon as possible. To help boost your rating faster, you should focus on keeping bills up-to-date. If you’re behind on a bill, pay it off before it goes to collections (and becomes a negative mark on your report).

Delinquent payments remain on your credit for seven years, sometimes longer. If you choose to pay off a delinquent account, make sure to do it before it’s charged off. If not, the seven-year clock will start all over again.

keyboard and mouse with pay button

Apply for a Debt Consolidation Loan

Paying down your debts will slowly increase your score. Creditors will also see your consistent payments, increasing your chances of getting a loan.

Another option is to apply for a reverse mortgage or cash-out refinance loan. Then use the funds to pay off your credit cards and other debts. Some choose to use a 401(k) loan to pay down their debts.

Paying off credit cards with high interest rates is a smart idea. The loan you use will likely have an APR that’s much lower.

If you choose to take out a loan against your 401(k), you have to pay it back within five years. This is automatically deducted from your paychecks, which can limit your cash flow.

Keep Your Accounts Open

Avoid closing your credit accounts. Those that have been open for a long time hold weight and can impact your score in a good way.

Creditors like applicants that have at least three open sources of credit. Make sure these accounts are current in payments.

Don’t Open New Accounts

It may be tempting to open up more accounts, but this won’t do your score any good. Each time your credit report gets a hit from a creditor, your score is negatively affected. Don’t apply for new loans or credit cards while you’re trying to get a mortgage or other major loan.

The inquiries you’ve had over the past two years will be seen. If a creditor sees you’ve been shopping a lot for credit, this will look bad.

Minimize How Much Credit You’re Using

If you have too many open lines of credit, this will work against you. Creditors look at your credit utilization. This is calculated by adding up your credit balances and dividing it by your borrowing power.

Your credit score suffers when you’re using too much credit. To a creditor, this means there’s less money to go around for a new loan or credit card.

door with sign showing an exit a way out

Get On the Phone and Negotiate

Creditors are used to collecting money. In many cases, you hold some ground to negotiate. You can attempt to agree to a smaller lump sum payment or low monthly payments.

Whatever agreement you come to with the creditor, make sure to get it in writing. You can also hire a company to negotiate on your behalf and manage the payments. But be wary of scammers.

Ask for a Credit Limit Increase

If you have credit cards you’re current with, ask the bank to increase your limit. For instance, if you maxed out the $750 limit, ask for an increase to $1,500. But don’t spend this money.

The idea is to have credit you’re not actually using, so your credit utilization is decreased.

Pay Your Bills Every Two Weeks

Paying down your debts once a month will take a long time. To speed things up, you can pay every two weeks.

This can work for your credit card payments as well. The creditors report your balance to credit bureaus each month. Paying twice per month will drive down the reported balance.

Only Use What You Can Pay Back

If you have a $1,000 credit card limit, only spend it all if you can pay it off at the end of the cycle. For example, you can use your card to pay your rent and light bill. Then use your check to pay off the balance.

Doing this every month will help to boost your score quicker.

hand paying out money

How to Improve Your Credit Score Quickly

Now, you have a better idea of how to improve your credit score quickly.

The tips above are how many consumers are improving their credit scores. You can attempt to do it all on your own or hire a debt expert to help you. Stay committed and you’ll eventually have the score you need to enhance your lifestyle.

Feel free to browse through the site for more information about improving your credit history and rating.

All articles include actionable tips to protect your credit. And increase your chances of getting a fixed rate mortgage!

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6 Comments

  1. I am confused about several credit terminologies. Can you describe the differences between open credit sources, credit accounts and lines of credit?

    • Hi Al,

      Great question. These terms can quite often be confusing. Typically, credit accounts are any kind of credit like a mortgage, car loan, credit card, retail credit etc. Lines of credit are usually secured by something like your home or business and fluctuate as the balance is paid down or advanced.

      Credit sources are all types of open credit including personal loans, title loans, payday loans and the like. So the terms may be confusing, however if you do take on different types of credit you should always focus on making your payments on time and not get overextended with the different credit sources that are available to you.

      Patrick
      Credit Squared

  2. What sort of hit does applying for a mortgage or shopping around for rates at different financial institutions have on your credit report? 

    Not paying down loans as quickly as possible sounds counter intuitive, you would have thought the faster pay down the better! 

    Good information to know and have in your back pocket.

    • Great question!

      Each new credit inquiry could have up to 5 points impact on your credit score.

      That’s why it’s a good idea to know which lenders you want to deal with before you go shopping for a mortgage or anything else that requires a credit check.

      Creditors will be less likely to approve new credit if they find you’ve been frequently shopping around.

      In addition inquires have a bigger impact if you have few accounts or a very short credit history.

      I think you should pay loans off as quickly as possible.  But you need to keep them for awhile to get the benefit of making payments over time. 

      Creditors like see on time every time payments and while your doing that it builds your credit score. Pay extra to principal, but make the payments for a period time to help improve your credit score.

      Thanks

  3. This is extremely helpful information in understanding credit scores.

    I have always struggled with them and what really affected them.

    It always seemed to me it was a critical measure that had a major impact on my financial situation, but I had no way to improve it.

    Thanks to these practical tips I can now take firm action towards improving my credit score. As a result, this will direct my day to day credit decision making towards practical choices that won’t impact my score negatively.

    Thank you!

    • Hi Lo,

      Happy to hear the article was helpful.

      Our financial future depends on maintaining a good credit score.  If you have one above 700 or even better 750, then you have a good chance of getting the best terms in most credit qualification situations.

      If your scores are below that then you have some work to do.  Never fear, there are always steps you can take to improve your credit score.

      If you have lots of accounts then take a look at a debt consolidation loan.  By aggregating all of your debt together into one loan, you can save on interest, lower your payments and get yourself on a path to pay your debt off faster.

      If your having trouble improving our credit, just follow the tips in the article and have a look at some of the other posts on this site.  Improving your credit knowledge will get you on the road to a better credit score faster.

      All the best.

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