PERSONAL FINANCE BLOG

Money shouldn´t stop making your plans come true. Learn how personal loans can help you!
Fastest Way to Improve Credit
1 Apr 2019

The Fastest Way to Improve Credit: Your Ultimate Guide

/
Posted By

FICO reported that the average score hit 700 for the first time in history in 2017. This is helping move people away from products like bad credit loans and no credit check loans, and towards low interest products.

What’s driving consumers to reach all-time high scores? In large part, the availability of knowledge on how to improve credit scores is causing it.

Wouldn’t you like to learn how to maximize your score?

Stay tuned to discover the fastest way to improve credit using these five tips.

1. Begin Paying Your Bills On Time

Out of everything that impacts your score, payment history for any personal loans or credit cards has the biggest influence. The fastest way to increase a credit score is to begin making your payments on time.

Some find that setting their monthly bills to auto-pay helps a lot.

If you think you won’t make your bill on time, then reach out to your creditor right away. At times, you can come to an agreement to extend the due date or reduce the payment amount.

Paying your bills on time helps offset past-debts, which we’ll talk about in the next section.

2. Face Your Past Debts

Those past debts you never paid off will haunt you on your credit score. When determining how to build credit back up, you’ll need to consider these past debts.

If you’re behind on an installment loan or any other loan that requires routine payments, then call the creditor as soon as possible. If you can’t pay right away, then don’t fret. Ask to set up a payment plan.

Many creditors will rescind previous late payments when you take such initiative.

Even after you pay them off, some may still remain as a stain on your report. Some may stay on your report for up to seven years.

That’s why step one is so important. You can counteract these negative dings with a more recent positive payment history.

3. Fix Mistakes on Your Report

Another tip on how to improve your credit score is fixing mistakes on your report.

First, you need to know how to check your score. There are several ways to check your score for free online. Look deep into your report and scan it for any errors.

If you find an error, then you need to dispute it. It will get removed from your report and increase your score.

Together, these top three actions will boost your score quite a bit!

4. Manage Your Credit Utilization

Your total balance-to-limit ratio impacts your score. This is driven by the total balance you have, and the amount you have available, on things like bad credit credit cards.

How much credit utilization is ideal? It’s complicated.

Using too little credit leaves lenders unsure about your trustworthiness. But, using too much can lead lenders to believe you’re having financial trouble.

FICO estimates more than half of credit card owners use less than 30% of their available credit. So, using about 30% of your available credit is a good goal to have.

5. Only Apply for New Credit When Necessary

The final tip on how to increase a credit score is to only apply for new credit when necessary.

When you apply for a new line of credit, lenders do an inquiry into your score. Hard inquiries occur when you’re looking for a loan or credit card.

Too many hard credit inquiries are one of the top factors that reduce scores. These checks can lower your score for up to two years.

Improving Your Credit Asap

Following these tips is the fastest way to improve credit. It takes dedication and consistency, but you can do it!

Do you have any other tips or suggestions for raising your credit score? We want to hear from you! Let us know in the comments section below how you manage your score. Here are some other other articles you might find interesting:

4 installment loan benefits no one told you about
Can you get no credit check equipment financing?
7 surprising reasons installment loans might be a good idea for you
Blindsided by unexpected medical bills? Here’s how no credit check loans can help