“This will be approved in 5, 4, 3, 2… Oh wait, I’m sorry we can’t authorize this contract right now. Unfortunately, you’ve failed our credit check“.
Have you ever had to have this conversation? A poor credit score can make it harder to take out new phone contracts, get a car, and a mortgage.
But credit scores about more than being ‘good with money’. To build a credit score, you have to have evidence that you are good at borrowing money – not just saving it.
The good news? If you’re wondering how to improve your credit score fast, there are lots of easy steps you can take. Never worry about applying for credit again by following our nine top tips for raising your credit score.
Read on to learn how to have a shining credit score.
1. Never Miss a Payment
Paying your bills on time won’t cause a dramatic increase in your credit score, but that doesn’t mean it isn’t important. Why? Missing payments is the one thing that decreases your score overnight.
Not only will it decrease your score, but a missed payment also shows on your credit report for up to six years. This is a red flag for any lender. If you failed to pay someone else on time, what’s stopping you from doing the same again?
2. Update Your Personal Details
Have you moved house recently? Make sure you’ve updated your details with any company that provides you with a credit account. This is so important.
Inconsistent details are one of the key markers of fraudulent activity. If you have multiple addresses linked to your name, it will raise considerable questions about your role in society.
Applying for credit is all about appearing trustworthy, so make sure your details are correct.
3. Make More Payments
To improve your credit score, you need to use more credit. No, we aren’t suggesting you bankrupt yourself trying. All you need to do is make regular micro-payments.
Next time you’re stopping at a gas station for a quick snack, put it on your credit card. This can seem counter-intuitive if you have the cash. But using credit on a regular basis proves that you are an experienced borrower.
But make sure you pay it back in full, on time.
4. Increase Your Credit Limit
Credit utilization is the amount of credit you are allowed, compared to the amount of credit you use. Your credit utilization may be causing your bad credit rating.
You should keep your credit utilization below 30%. For example, if you have $1000 on your card, keep your balance below $300. This helps show lenders that you are financially stable and not likely to be a risk to them.
A word of warning; if you have a history of money problems, make sure you’re in a position to look after your finances responsibly before applying for more credit. Improper usage of an increased credit allowance could lead to more debt if you aren’t careful.
5. Keep Unused Accounts Open
It might seem logical to close unused bank accounts. But don’t. Having bank accounts for prolonged periods of time adds to your image as a citizen that contributes to the economy.
Also, closing accounts will increase your overall credit utilization. As per the last point, a higher credit utilization ratio will reduce your score.
But why leave them unused? Try storing a positive balance on those cards or using them for small payments like gas or online shopping.
6. Use the Right Credit Cards
There are several options when you’re shopping for a credit card. If you already have an average credit rating, you can opt for a normal credit card with a major bank. These credit cards tend to have higher credit limits, but the exact amount will depend on personal circumstances.
If you have a poor credit rating, you can use a credit building card. These cards are designed to be low-risk lending, so the credit limit will be low. But, lenders will be more forthcoming about lending to you if you have bad credit.
The final option is using a secured card. This is where you pay your credit limit upfront and then use the card like any other credit card. This is a great option if you have the cash to spare, but want a higher limit than you could get on a normal credit card.
7. Dispute Errors
Simple mistakes on your credit report could be dragging down your score. Use an online credit checker to get your report and check for any mistakes, from personal details to missed payments.
Once you’ve identified the errors, you should dispute them with the credit bureau or credit repair companies. You should receive a response within 30 days, and your score will increase after that.
8. Minimize Hard Searches
Hard searches are done by creditors when you apply for credit, a deep-dive into your credit report. Unfortunately, hard searches temporarily reduce your credit score because it can be a red flag if people are applying for lots of credit.
So our best tip is to apply for credit over a period of months. This should stop your score from reducing too much.
Another tactic, if you don’t mind taking a hit for a few months, is to apply all at once. This way, you’ll take a more dramatic hit initially, but it’ll continue to build in the following months.
9. Use a Credit Repair Company
To see exponential progress, you should always keep track of your credit score. You can have a certain amount of control by using online checkers. But, these won’t provide you with in-depth data about how to improve your credit score fast.
To see the best results, find a credit repair company to do the hard work for you.
A credit repair company can do a deep-dive into your personal file and then use a wealth of experience to make the most effective changes. The small, upfront cost will seem negligible when you’re approved for that high-cost car you always dreamed about.
How to Improve Your Credit Score Fast; The Down Low
So now you know what to do to improve your credit score fast, why not get started today? Follow these nine simple steps and see your credit score skyrocket!
These tips will get you started, but why not contact us at The Credit Agents to see how we can help you increase your credit score?