7 Tips for Fast Credit Score Improvement

A bad credit score is no laughing matter.

Indeed, a suboptimal credit score simply makes many facets of life exponentially harder.

You’ll struggle with everything from getting a loan, to higher interest rates and even securing tenancy with a landlord!

For example, the difference between a ‘very good’ and ‘fair’ credit score can equate to a 311% lower interest (on a $22,000 car loan).

Let’s face it, though, you don’t have to be struggling with credit to enjoy a boost to it; we all benefit from a fast credit score improvement! Even if credit is already looking good, seeing it increase is only ever positive.

Which brings us to the point of this article. Essentially, what can you do to see a quick and easy boost to your credit rating?

Keep reading for 7 tips to help you do exactly that.

1. Download Your Credit Report

First thing’s first:

To start improving your credit score, you need to know where you currently stand.

For that, leverage your right to download a free annual credit report from Equifax, Experian or TransUnion. Pay close attention to the report in order to spot any mistakes that have been made.

Mistakes come in different forms but are usually made through simple human error. For example, a payment may have been erroneously marked as late. You paid it on time, but that fact got lost in translation somewhere.

The bad news for you is that your credit score takes a nosedive in the process.

Which leads to our next point…

2. Correct the Mistakes

Okay, so you’ve got the report and noticed an error or two.

Now it’s up to you dispute them, in the hope that they’ll be struck from your report. If you can demonstrate that a mistake has been made (and have evidence that proves it), then there’s a good chance you can have it removed from the report.

You’d be surprised how many people fail to do this! However, successful redaction of something like a missed repayment can have a quick and positive impact on your credit score.

3. Stop Defaulting!

Late or defaulted payments are anathema to your credit boosting endeavors.

Don’t do it! Make sure your monthly debt repayments are made as and when required. Failure to do this is a recipe for disaster- a vicious circle develops in no time.

After all, penalties almost always apply when you miss a repayment date.

Rather than paying down your debt, you end up in more of it. The result is an ever-burgeoning burden of debt that makes it even harder to make your payments!

It’s worth remembering that credit scores reflect your ability to repay debt. Thus, it goes without saying that making your payments in full each month will restore your score.

4. Keep Credit Utilization in Mind

You may never have heard of credit utilization!

But it’s another central part of improving your credit. Let’s start the explanation of why it’s so important by defining the term.

In simple terms, it’s a ratio of debt to available credit.

Basically, you have a balance to pay (i.e. the debt you owe), alongside a level of credit that’s available to you. The ratio of one to the other is referred to as your credit utilization.

Imagine having a card with a credit limit of $20,000.

If you spent $2,000 this month, the credit utilization would be 10%. Spent $10,000? Well, your utilization is 50%.

Opinions vary on the best percentage for your overall credit score. However, strive to keep it down to a 30% utilization or less. Do so and you’re sure to see a boost to your score.

Pay down your debt ASAP if you ever go beyond this level.

5. Not All Debt is Created Equal

It’s possible that you use more than one credit card each month.

In these cases, getting strategic with your repayments can improve your credit score.

Why? Because that score takes into account the utilization ratio on each card you possess! The positive impact of one card with a great utilization ratio is negated by another card with an awful one.

As such, you should strive to pay down the debt on the card with worse utilization first.

6. Increase the Credit Limit

Okay, it’s time for math class.

Let’s imagine a credit card with a $10,000 limit on it. Last month threw some financial challenges your way, forcing you to spend the full amount.

As you know, that means your current utilization ratio is 100%, which isn’t good. The situation is particularly dire if there’s no chance you can make the repayments in time.

Thankfully, there’s a quick and easy hack to improve the situation:

Increase your credit limit.

Imagine doubling it to $20,000 instead of $10,000. Suddenly, you’ve only spent half of the limit! As a result, the utilization ratio drops to a more respectable 50%.

7. Phone a Friend

Another option at your disposal is to piggyback on somebody else’s credit.

You find someone (usually a close friend or family member) with an awesome credit score and see if they’d be willing to put you as an authorized user on their account.

It puts their credit score in jeopardy, making it a risk on their part. However, it can works wonders for yours! Sound interesting? Here’s a post where you can find out more about the process.

Time to Enjoy a Fast Credit Score Boost

Credit scores have a significant impact on many aspects of life.

When it’s low, we suffer; when it’s high, we rejoice.

As such, we could all do with boosting our credit score whenever possible. Just like the state of your bank balance, the number can never be too high!

However, the situation becomes more pressing for anyone struggling with particularly poor credit ratings. Thankfully, as we’ve seen, there are numerous steps someone can take that foster a fast credit score improvement.

Hopefully, this post has provided some useful insight into what to do to make it happen. Good luck!

Are you looking for more articles like this one? Search ‘credit score’ on the website now for further advice on this topic.

Jeff Campbell

Jeff Campbell is a father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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