Can’t get approved for a better credit card?
Or you just recently got denied an auto loan?
It’s probably your credit score.
If your credit score is currently in the “poor” to “fair” range, and you are shopping for a credit card or a loan you’ll need to raise it up…and quickly.
But not everyone knows how to do it, let alone do it quickly and efficiently.
Stick with me, because with over two decades of experience as a financial coach and banking expert; in this blog, I’ll show you the quickest steps to improve your credit score to help you buy the house of your dreams.
Many common mistakes, like late payments and high credit utilization, can dangerously affect your credit.
Credit scores are a reflection of how responsible one is to repay debts.
On the other hand, if you’re currently in the “good” credit score range, it’s always better to improve and get higher scores as they are usually offered the best terms and the lowest interest rates.
The better your score, the easier it is to get approved for various types of credit or loans.
And the more things you would be able to accomplish.
While it may take a few months to start seeing improvements in your score, if you apply what you learn in this and other articles on my website you will be on the right path on building your credit score fast.
Here are fifteen of the best ways to help improve credit scores quickly:
15 Best Tips To Improve Your Credit Scores Quickly
Credit scores can impact almost everything and every aspect of our financial health.
It can affect whether or not we’ll get approved for your much-needed car or new apartment.
It can even impact the jobs we can get or various kinds of insurance.
A higher credit score can unlock so many other credit opportunities.
Not only that, but an excellent credit score can also give you better loan terms and lower interest rates.
If you’re unsure of how to improve your credit score, here are fifteen of the best ways to improve your credit score quickly:
1. Make all payments on time
As we’ve tackled earlier, payment history is the biggest factor determining your credit score.
Remember that it takes up 35% of your score, that’s why paying bills on time consistently is crucial when you’re trying to boost your credit score.
Multiple missed or late payments can hurt your credit score for at over 7 years and more.
Set Up Automatic Bill Payments
The easiest way to avoid missed payments is to install an Autopay.
To avoid an overdraft, just ensure that you have more than enough money on your account to cover your monthly bills.
You can also make calendar reminders on your phone to have an extra way of alarming when your due date is approaching.
2. Pay Down Balances
Your Amounts Owed or Credit Utilization is the second most important factor that influences your credit scores.
Basically, it’s the amount you owe compared to your total available credit.
Keeping your credit utilization below 30% of your limit is best advised. People with higher scores usually have a rate in the single digits.
Try to pay off any high-interest credit card debt first since these are the ones that cost you more money.
3. Credit-Builder Loan
If your main goal is improving your credit score from scratch, try getting a credit-builder loan.
As the name suggests, a credit builder loan is specifically designed or focused on building credit.
With a credit builder loan, you must make fixed payments for 6-24 months. Also, your money will be saved in a savings account until the end of the loan term.
Moreover, your lender will report your great payment history to the credit bureaus, which will not help strengthen your credit score.
4. Get a Secured Credit Card
Getting a secured credit card is also one of the easiest ways to help boost credit scores.
When you get a secured credit card, you’ll require a cash deposit, which will also become your credit limit.
Using a secured credit card is just like using a normal credit card. But with a secured card, your deposit protects the issuer from default.
Using a secured or traditional credit card responsibly can help quickly improve credit scores.
5. Join an Account as an Authorized User
Joining a trusted family member’s or a close friend’s credit card account as an authorized user can also help improve your credit score quickly.
You’ll use this card to make usual buys, and the card’s payment history will show up on your report.
However, consider that your credit score may also be damaged if the card’s main owner does not pay his/her bills on time.
6. Don’t open too many accounts at once
Opening too many unnecessary credits at once can hurt your credit scores.
FICO and VantageScore consider your credit inquiries when calculating your scores.
Only apply for accounts you need to avoid negatively impacting your score.
In addition, some lenders and credit issuers can deny people who have recently opened too many credits, even if the individual has a high credit score.
7. Increase your credit card limit
If your bank sees that you’re responsible enough to manage your finances, it can approve you for an increased credit limit.
Increasing your existing credit limit will also reduce your utilization ratio, improving your credit scores even more.
However, some banks may conduct a hard inquiry or a soft inquiry when processing this request, which temporarily lowers your credit scores.
8. Pay down your credit card balances
One misconception consumers have is that they need to carry a balance to increase credit scores.
However, paying down credit card balances will still reduce your credit utilization, which generally increases your scores.
Even if you pay your balance in full each month, your report will still reflect a balance, so it’s better to pay your card down to a zero balance before the due date.
9. Keep Old Accounts Open
The length of your credit history also impacts your credit scores. When calculating your FICO score, the length of credit history takes about 15% of your score.
Keep your oldest of the old accounts open to ensure that you strengthen your credit scores.
Another secret tip is to close newer accounts. Closing recently opened accounts can increase the average age of your accounts and help improve your credit score.
10. Track Your Credit Score
Monitoring your credit score and credit report is another great way to improve credit.
Tracking your score can help you intervene quickly if it encounters a drop.
On the other hand, tracking your credit report can help decrease the chances of fraud and inaccuracies.
You can track your credit score through your credit card issuer or lender or pay for your FICO score at myFICO.com
You can get a free copy of your credit report from the three major credit bureaus through AnnualCreditReport.com.
11. Responsibly Add to Your Credit Mix
Having many types of credit accounts can help improve your credit since Credit Mix takes up about 10% of credit scores.
The type of credit doesn’t necessarily have to be credit cards; you can apply to other kinds of credit, such as installment loans. Just ensure that you have enough of a budget, as you’ll need to pay a fixed amount per month.
Don’t apply for a new credit if your main goal is to improve your credit score, as it can put your scores at risk if you’re unable to repay your debts.
12. Create a Budget That Works For You
To responsibly pay your debts monthly, you’ll need to create and stick to a budget that works for you.
Making the perfect budget will clarify the amount you’re earning and the amount you can safely spend on your purchases.
A budget can also help you make smart choices when spending credit and limit your credit utilization ratio.
13. Work With a Nonprofit Credit Counseling Agency
If you’re struggling to set up a budget that works for you or really having a hard time paying off debts on time, you can consult with a certified credit counselor or a nonprofit credit counseling agency like InCharge Debt Solutions and Money Management International.
These credit counselors can provide a concrete debt management plan to help reduce interest and lower payments.
14. Add Rent Payments to Your Credit Report
Nowadays, you can also add your rent payments to your report.
You can either sign up for a rent reporting service independently or ask your landlord to sign up for it.
If you choose to sign up independently, keep in mind that some services require your landlord to verify your payments.
15. Be Patient
Lastly, one of the best pieces of advice I can give you on your credit-building journey is that you need to be patient.
Improving credit will not happen overnight. It can take years to get a really high credit score.
But with hard work and responsible credit use, you can surely get approved for that car, new apartment, or a better personal loan.
How To Improve Credit Score Quickly: Final Thoughts
Higher credit scores give you access to better financial opportunities, such as better loans, phones, cars, houses, and more.
Credit scores show potential lenders and issuers whether you’re responsible enough to repay debts.
There are many ways to help strengthen your credit score.
For instance, you can apply for a credit builder loan, get a secured credit card, or join as an authorized user on someone else’s account.
But when doing all of these things, the most crucial part is to repay your debts consistently.
Payment history takes about 35% of your credit score. Unable to repay these debts can cause a massive drop in your credit scores for years!
You’ll need a lot of patience when building credit, as your scores won’t improve drastically overnight.
It can take months or years to see a massive improvement.
That’s why it’s best to start now!
Set Up an autopay or make calendar reminders to help remember all your bill due dates.