Would you like to improve your credit and achieve the highest credit score possible? Perhaps you’ve needed to resort to personal loans no credit check or payday loans online due to your credit score suffering.
In order to do this, you obviously need to know what your credit score is. And believe it or not, a lot of Americans don’t have the slightest clue where their credit stands. About 30 percent of people aren’t sure what their credit score is at the moment.
Figuring out what your credit score is so that you can improve it is the first step you should take. But from there, you should also take a series of other steps to increase your credit score and make yourself more attractive to lenders moving forward.
Even if your credit score is bad right now, you can dramatically improve it within just a year or two and get yourself back to the place you want to be. Here’s how to reach your highest credit score.
Dispute Errors on Your Credit Report
When is the last time you took a look at your credit report and went through it with a fine-toothed comb?
If you’re not checking your credit score regularly, there’s a good chance that you’re not checking your credit report, either. And that could lead to big problems as far as your credit score goes.
Studies have shown that approximately 20 percent of people have at least one error on their credit report. That error could be bringing their credit score down dramatically and making it hard for them to get loans.
But at the same time, there are millions of Americans who haven’t checked their credit reports in years and millions of others who have checked them but haven’t caught the errors that are on them.
Before you start trying to increase your credit score through other methods, you should inspect your credit report carefully and see what you can find on it. There are some instances in which you can increase your credit score in under a month by finding errors and reporting them to the credit bureaus.
Get Current on Payments
Have you fallen behind on some of the installment loan payments that you owe to creditors? This can play a big part in your credit score going down, down, and down some more over the years. It’s why you should do whatever you can to bring your payments current.
This is usually easier said than done for most people. If you’ve fallen behind by more than a few months, you could owe hundreds or even thousands of dollars in minimum payments to a single creditor.
The good news is that most creditors are more than willing to work with people who are having a tough time making payments. Often times, they’ll set them up with a payment schedule or provide a new bad credit loan that works for them based on their specific income.
As long as you stick with the schedule that a creditor comes up with for you, you’ll be able to bring your accounts current again. You’ll also be able to avoid having your credit score go down any further than it already has.
The key will then be to keep your payments current from that point on. Many creditors won’t extend a second chance to you if you fall behind on your payments again.
Pay Down Debt
How much debt do you have listed on your credit report? From your credit card bills to your personal loans, you might have tens of thousands of dollars worth of debt on your hands right now.
The average person doesn’t have the funds to swoop in and pay down all of their debt at once. Simply making the minimum payments on the debt is almost too much for most people.
But there are solutions available to those who want to pay off all their debt at once to make it more manageable. You can take advantage of something called debt consolidation to erase all your debt at one time.
When you do debt consolidation, you take out a debt consolidation loan that is used to pay off all your debt. You then pay back the company that extended the debt consolidation loan to you over time.
Debt consolidation can help those who have less-than-perfect credit scores because it eliminates all the debt they have and frees up a bunch of available credit. That available credit alone will send your credit score skyrocketing and could increase it by 100 points or more in no time.
Your debt consolidation loan will eventually show up on your credit report and let creditors know that you’ve taken it on. But it should help, not hurt, your credit and show creditors that you’re being responsible as far as paying down your debt is concerned.
Avoid Closing Accounts
After you’ve paid off all the debt that was bringing your credit down, you might be tempted to close credit card accounts and any other accounts that don’t have a balance on them.
This isn’t the worst idea in the world if you’re afraid that you’re going to go back into debt at some point in the near future. But you’re much better off cutting up your credit cards so that you don’t use them again while leaving your credit card accounts open.
As we just touched on, credit card accounts that are open will provide you with available credit. That available credit will lower your credit utilization, which is one of the most important factors when it comes to your credit score.
With that in mind, you’ll benefit from leaving your credit card accounts open but untouched in a big way. You’ll see your credit score spike once creditors realize just how much available credit you have.
Apply for New Forms of Credit
If you have a shopping addiction or another issue that has caused you to struggle with financial issues for most of your life, you probably shouldn’t even think about introducing any new forms of credit into your situation. You’ll be asking for trouble!
But if you trust yourself to be responsible with one or two new credit cards, you might want to consider adding a couple of them to your wallet. They’ll give your available credit an even bigger boost and suddenly make you look that much more attractive to lenders.
To be clear, you should avoid applying for too many new forms of credit at once. That could actually lead to your credit score plunging since creditors will be able to see that other creditors have inquired about your credit history when they check your report. You can also look at no credit check loan lenders, who won’t do a hard credit check that will show up on your report.
But generally speaking, applying for one or two credit cards won’t impact your credit score that much during the application process. And they could send your credit score even higher than it already is if you play your cards right.
Resist the Urge to Rack Up New Debt
We’ve mentioned this a few times at this point, but it’s definitely worth repeating. Once you get yourself out of a massive amount of debt, do not—again, do not—do anything that will send you right back into debt.
Don’t decide to use your credit cards to do home improvement projects that you’ve been putting off. Don’t book your first family vacation in five years with your credit cards. Don’t even use your credit cards to pay for necessities like food and gas.
Keep your credit cards at home and learn how to pay for things with cash more often. Start putting together an emergency fund, too, so that you have more than enough money on hand the next time you need to call a plumber or make a major car repair.
Check Your Credit Report Often
When you’re done taking all the steps we’ve laid out here, you should have the highest credit score possible, and it should continue to go up as you pay off your debt consolidation loan.
But that doesn’t mean you’re automatically in the clear! You should keep on checking your credit report as you move forward to make sure that your credit score stays as high as it can be.
There are many Americans who endure problems with their credit scores due to identity theft. There are others who have errors on their credit reports wipe away all the progress they’ve made.
If you want to avoid finding yourself in either of these situations, you should make every effort to check your credit report and credit score once or twice a year. It’ll allow you to sleep better at night knowing your credit score is in good shape.
Obtaining the Highest Credit Score Possible
Would you like to begin the process of achieving the highest credit score that you can possibly get? It’s not as hard as you might think to get yourself going and start paying down debt.
Check out some of the loans that you can apply for right now in order to start knocking out your various debts. They’ll make it easy for you to get your finances in order so that you can get to work on improving your credit score. Here are some other articles you might find interesting:
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