The average credit score in the U.S. hit a new high back in 2016 when it crept all the way up to 695. It proved that many Americans are taking the right steps to improve their credit scores over time.
But it also proved that there are plenty of Americans out there who still have a way to go when it comes to bringing their credit scores up. While 695 is a decent score, it still falls into the “Fair” range and could be improved even more.
If your credit score isn’t as high as it should be, you should learn how to raise your credit score in 30 days. In doing so, you can put yourself in a much better financial situation and increase the chances of getting approved for your next loan.
Here are ways you can go about raising your credit score substantially in a matter of just a month.
Check Your Credit Report and Credit Score
The first thing you’re going to want to do when trying to increase your credit score is to take a look at your credit report and credit score.
In a survey done in 2017, about 30 percent of Americans admitted that they didn’t have the slightest clue what their credit score was.
If you’re going to stand any chance of increasing your score, you need to take the time to find out what it is. It will give you a better idea of what you’re going to need to do in order to bring it up quickly.
In some cases, you might be able to increase your credit score simply by having a mistake corrected on your credit report. In others, you might be able to do it by paying off a debt that you forgot you even had.
Whatever the case may be, you should find out how to raise your credit score in 30 days by looking at your credit report and seeing what changes you need to make. It will put you on the right path from the beginning.
Dispute Unfamiliar Items on Your Credit Report
Is there a credit card balance on your credit report that you don’t recognize? Or is there a bunch of missed payments on a loan that you didn’t actually take out?
You would be surprised by how often people find mistakes on their credit reports. There are about 8 million Americans who contact a credit bureau every year to dispute something they’ve found on their report.
If you find a mistake on your credit report and take the time to report it, you could see a big bump in your credit score in a matter of just a few weeks. It won’t take a whole lot of effort on your part, but it will make a big difference in what your credit score is.
Decrease Your Credit Utilization Ratio
If you check out your credit report and don’t find any errors on it, then it will be time for you to start finding ways to bring your credit score up on your own.
One of the most effective ways to do this is by decreasing your credit utilization ratio.
Your credit utilization ratio is a reflection of how much debt you have accumulated compared to how much available credit you still have on the books.
In general, you should try and keep your credit utilization ratio under 30 percent. This means that, if you have a credit line of $10,000 on a credit card, you should keep your credit card balance under $3,000 at all times. This will show lenders that you are using your available credit responsibly.
Your credit utilization ratio plays a very important part in how credit bureaus calculate your credit score. So if you have a very high credit utilization ratio right now, you should work to bring it down under 30 percent. You will reap the benefits of doing this right away.
Attempt to Remove Late Payments from Your Credit Report
Do you have any late payments listed on your credit report?
Late payments are not a good sign, and even just a single late payment could bring your credit score down quite a bit. But the good news is that there are some creditors who would be willing to remove late payments from your credit report if you ask.
If you have a string of late payments over the last year, there’s a good chance you’re not going to be able to get them all removed. But if you missed one or two payments and want to get things squared away, you can usually contact a creditor and figure out a way to make good on your missed payments while having them removed from your credit report.
Again, not all creditors are going to agree to do this for you. But you can at least explore it to see if it would help your credit score.
Consolidate Your Credit Card Debt
Has your credit card debt become completely unmanageable?
One of the ways you can make it easier to handle is by consolidating your debt. Debt consolidation involves taking all of your credit card debt, putting it into one big pile, and then paying it down over time.
Debt consolidation can be a great option for anyone who is having trouble climbing out of a mountain of debt, especially if that debt has high interest rates attached to it. You can get a better rate and set up a payment plan that will allow you to pay down your debt more efficiently over time.
Paying off all your credit card debt will also free up a lot of available credit and give your credit score a boost. Just make sure you don’t go and rack up additional debt on your cards later since that could put you in an even worse position than you were already in.
Make Small Charges to Inactive Credit Cards
While paying down debt is one way to bring up your credit score, you can actually get a slight bump in your credit score by accumulating a little debt.
You don’t want to put too much debt onto any of your credit cards. But if you have cards that you haven’t used in a while, it’s not a bad idea to make small purchases with them just to keep those cards active.
You should consider using a credit card to pay for gas or coffee on a regular basis and then get into the habit of paying that credit card off once you do. It will show that you’re using the card responsibly, and more importantly, it will keep the card active for you.
Request a Higher Credit Limit on Your Credit Cards
About once every 6 to 12 months, you should contact your credit card companies and ask them if they would be willing to give you a credit increase. Many credit card companies are more than willing to do this for those who have shown a willingness to make payments on time.
When you ask for and receive a higher credit limit on your credit cards, it will bring your available credit number up and push your credit utilization ratio down. This will usually result in a credit score increase right away.
While you won’t always be successful when you ask for a higher credit limit on your credit cards, it certainly can’t hurt to ask. And if you play your cards right, it could result in your credit score going higher and higher over the course of the next few years.
Resist the Urge to Apply for New Forms of Credit
In an effort to free up some available credit, you might be tempted to apply for new credit cards.
The problem with this is that it will result in credit card companies making hard and soft inquiries on your credit report. Those inquiries can actually drag your credit score down and take a toll on it for up to a year.
Soft inquiries don’t have as much of an impact as hard inquiries. But often times, you won’t find out if a lender made a hard or soft inquiry until after it’s already been done.
So while you might think that applying for new forms of credit will help you, it could actually hurt you in the long run.
Monitor Your Credit Report to See How It Changes
The key to bringing up your credit score is keeping a close eye on your credit report as often as you can.
Your credit score can actually fluctuate on an almost daily basis due to the actions you take to try and improve it.
If you’re not seeing a big enough boost in your score, you should keep at it and continue to try to bring it up.
As you can see, there are many different ways to do it. If one thing doesn’t work, try something else until you get the results you’re looking for.
Knowing How to Raise Your Credit Score in 30 Days Is Half the Battle
Now that you know how to raise your credit score in 30 days, it’s time for you to go about actually doing it.
Whether that means contacting the credit bureaus to report an inaccuracy on your credit report or taking out a personal loan to pay down debt, there are so many steps you can take.
Check out our blog for tips on how to bring your debt down and clear up your credit report.