How to raise credit score fast.
If your credit score is lower than you’d like, don’t despair! There are ways to improve it easily, quickly, and without complications. Just by following a few healthy financial practices and a couple of extra tips, you could boost your credit score by as much as 100 points in your favor in a relatively short period.
Even scores classified as “fair” (regular) and “bad” (poor) are capable of experiencing notable improvements, thus leading you to a better position in the financial field. Think that, with a good credit score on your side, you would have more opportunities to access loans, cards, and other lines of credit with attractive rates and more comfortable payment terms.
What is the credit score, and how is it calculated?
Before entering fully into the subject, let’s see the credit score in detail. The credit score, also known as “score,” “credit scoring,” “credit score,” “credit history,” or “credit record,” is nothing more than an index used by banks, institutions, lenders, and other financial entities to determine how viable it is to approve a loan or any other financial instrument for a person or company.
But how does the bank come to this conclusion? A specialized system automates the calculation of specific operations and analyzes the probabilities that the borrower or applicant would have of going into default or non-payment. In a few words, the credit score is nothing more than a detailed financial profile that allows financial institutions to know the level of risk of their potential clients.
The higher your credit score, the more desirable you will be as a customer, and vice versa. These scores are handled on a scale that ranges from 300 to 850 points and includes the detailed analysis and study of five factors:
- Your payment history
- The total sum of debts
- The number of credits in use
- The age of your credit history
- Recently requested loans or credits
Becoming a “desirable customer” has its advantages, among them: access to lower APRs, obtaining mortgages and personal loans with beneficial interest rates, enjoying fast approvals, access credit card offers with bonuses or prizes, among others.
How can I raise my credit score fast?
If you need to raise your credit score quickly, but you have no idea how to do it, or you are not happy with your credit score, don’t worry! Score points are dynamic and change over time.
To improve them, it will be enough for you to start applying a couple of healthy financial practices, such as the following:
Look for errors in the report and, if found, make a claim.
Any wrong information reflected in your credit score report could throw away all your effort. That’s why the first step to improving your credit score will be to review your information carefully. Please pay attention to the points that could be affecting your score and compare them with the data you have on file.
You’ll need to have your most recent financial report handy to do this. Major credit bureaus like Equifax, TransUnion, and Experian offer free information every 12 months. Request a copy of yours through AnnualCreditReport.com and identify:
- late payments
- Delinquent or unpaid records
If you notice errors, such as that you paid one of your credit card payments after the due date and delivered it on time, file a claim to remove this record from the report. This is called disputing an error. Agencies are required to investigate each dispute and correct it. You will receive a response to the claim in approximately 30 calendar days.
Please list the types of loans you have and combine them with others.
If you want to raise your credit score, you need to prove to financial institutions that you are a highly desirable customer. Therefore, the idea is to have several credit options at hand, even if you do not use them.
Our recommendation? Identify all the lines of credit you work with and add a couple more to the list. For example, if you only have credit cards and a personal loan, you might consider opening an installment account or applying for revolving credit.
This simple practice can improve the perception of your financial solvency, causing your credit score to increase significantly.
Pay all your bills and debts on time, no exceptions!
None of the financial strategies in this guide will work if you pay after the due date. Remember that the payment history has a great weight in the credit score report, and a single delay could jeopardize all the progress you make. Late payments stay on your accounts for up to 7 years and are very difficult to remove.
To avoid a delinquent mark on your score, learn to prioritize essential payments and create a payment schedule. Here you have freedom: the important thing is that you are solvent. For example, you can direct bill payments, essential services, and subscriptions to a checking account that you only use for direct debits. You can also set alerts on your mobile phone, be guided by a payment schedule, or use a financial app.
If, for some reason, you don’t have the financial resources to pay all your debts on time, don’t despair! Analyze your pending payments and evaluate which expenses are expendable. Try to eliminate them from your list and keep only the ones you can manage from month to month.
Call your creditor immediately and propose a short-term payment plan if you miss a payment, even for just one day. Take advantage and ask him if, in addition to accepting the rescheduling of the debt, he would consider not informing the credit bureau about your delay.
This way, you’ll buy time to get up to speed, and you won’t see a blemish on your credit score.
Use micropayments as your allies, especially in your credit cards.
Making small payments or credits during the month is a healthy financial practice. Why? First, it allows you not to spend all of your income before paying off debts. Second, it reduces the balance of your credit cards and loans, making the impact on your finances less. And finally, it will help you maintain a debt-free line of credit.
This last factor is crucial because credit bureau’s study to prepare financial score reports is how much debt capacity you have and how much you are currently using.
Let’s see it in an example. Imagine a credit card with a maximum limit of $1,000. If you keep a balance below 30% of the boundary, that is, less than $300, there is no problem. But if every month the balance reaches 90% of the limit, about $900, you would be showing that you do not have the financial capacity to face your payments month by month.
This is not to say that the solution is not to use credit cards. You can do it as long as you make micropayments during the month. Think that the lower the use of your credits, the more financial benefits you will obtain.
Check your credit limit and request a higher one.
This point is related to the previous one. The higher your credit limit, and as long as you maintain the same debit balance, your score will be better. Which is the reason? That without much effort, your total credit utilization will drop instantly.
So contact your credit card issuer and ask how to request a higher limit.
Become the authorized user of someone responsible
Authorized users enjoy the line of credit of a cardholder without being obliged to pay. If you have a short credit life, either because you are very young or just starting to build your credit history, asking a family member or friend with long credit life and a reasonable credit limit to add you as an authorized user could increase your score. Almost instantly.
The cardholder can keep the plastic to prevent you from using it since you do not need to make movements, payments, or any other operation: all you need is to use their credit history as a boost to improve yours.
Don’t cancel your credit cards.
Although canceling a credit card can be an excellent option to avoid over-indebtedness, you shouldn’t do it! At least not if your goal is to add some points to your score. Remember that closing a line of credit means losing that limit and, therefore, reducing your total credit.
The lower your credit limit in general, the more risk you add to your profile. It would be best to keep your credit cards active and use them occasionally.
How many points does the credit go up per month?
This question is difficult to answer because the number of points that the credit goes up per month varies depending on the credit history of the person we are analyzing.
Can you raise your credit score by more than 100 points with these tips?
Is raising your credit score 100 points or more easily and quickly realistic? According to the new survey from Experian and the organization’s director of public education, Rod Griffin, yes, it is! Like many other financial specialists, Griffin states that “the lower a person’s credit score, the more likely they are to get a raise of up to 100 points”. The explanation is simple: whether your score is rated poor or fair, small changes (like these) can make a difference.