Credit scores drop for many reasons, some of which may be beyond your control, such as when a person loses their job, go through foreclosures, or adverse medical conditions. For most people, it becomes very difficult to keep their bills current during such trying times. Whatever may have caused your bad credit, the good news is you can increase your credit score again.
Or perhaps you’re just building your credit and wondering how you can increase your credit scores? I hope these tips right here will provide you with useful ways to boost your credit score. I will be sharing some of my experiences as well on how I went from a poor credit to an excellent one in record time! While our circ*mstances and situations may be different, I believe you will find one or two tips here to help you get a high credit score.
What Is A Credit Score
A Credit Score is a measure of your credit-worthiness. In other words, this is what lenders look at to determine if it’s safe to lend to you and at what cost they should lend to you. Creditors want to make sure that they are able to get back their money as scheduled, on time and with interest! They rely heavily on your credit score to make this determination.
A credit score is a number, typically anywhere from 300 (Poor) to 850 (Excellent). These categories are usually a range of numbers and vary slightly among the major 3 credit bureaus – Experian, Transunion, and Equifax.
What Is A Good Credit
Typically, a good credit starts from around 670 depending on the credit bureau. However, a good credit generally may depend on the purpose you need it for, and the industry you are lending from. But overall, the higher your credit score, the better and more favorable for you regardless of who you are doing business with.
Why Is Good Credit Important?
The higher your score, the better your chances of getting credit at better terms and rates. In other words, poor credit is very costly as you pay more in interest over time. This is because poor credit gets less favorable credit terms and conditions. Not having good credit can deprive you of essentials of life, like the ability to rent a place to stay, for example. It has even deprived some of their dream jobs! Yes, it is that serious.
How To Check Your Credit Score
Checking your credit score is very easy. You can check credit score free once a year (at anytime during the year). I typically run my free credit reports every January. For several years now I personally have used AnnualCreditReport.com. I’m not affiliated with them, but just sharing what I have used to check my credit report, and my husband’s, for several years. Through them, I am able to get FREE credit reports once a year from all 3 credit bureaus – Experian, Equifax, and Transunion. Seeing all 3 is good, so you can easily see and investigate any discrepancies. The process is simple, easy and fast for me. You get your credit reports in about 10 minutes or less!
Apart from getting your annual free report, you can also pay any of the credit bureaus to get your reports generated. There are also other companies that offer free credit reports, like Credit Karma, and Credit Sesame. You can get your Transunion and Equifax reports through them. You can check out the different options available. But be careful to make sure they are legit. As long as it is you pulling your credit, and not anyone else, it will not have a negative effect on your credit, no matter how many times you run it.
Some banks, like Chase bank, now offer free credit scores to their customers. If you have a credit card with them, you can access your credit scores through their “Credit Journey” website. They not only update the scores weekly but also give you some credit report “summary.” They will also send you email alerts on changes in your scores, new accounts opened under your name, new inquiries, etc. It is indeed a very useful FREE service, so if you have a Chase Card, contact them if you are not already using this free service.
Tips on How To Increase Credit Score
Here are some ways to raise credit scores quickly. Again, note that depending on past disciplines and conditions, the span of time will vary per individual.
Start Paying Bills On Time.
If you have been missing payments in the past, do all you can to pay at least the minimum going forward. If you can do more than minimum, by all means, do that. The more you can pay, the better. Avoid late payments or not paying at all. These can lead to collections and all of these are what negatively impact your credit score.
Automating your payments can also help if you often forget to make payments when due. Set up automatic payments from your bank (or other means) well ahead of the due dates.,
If You Can, Pay Off Your Credit Cards.
For many years I had the money I could use to pay off some of my credit cards but didn’t. Because it felt good to see money in a savings account, I was reluctant to pay off the cards. But it absolutely made no sense. I was paying much more in interest charges on the cards than what I was getting as interest on the “savings” account. Thankfully, a time came when I decided I had wasted enough money on credit card interest payments, and took the leap to pay off the cards.
A note of warning here though. This works well only if you have other money saved for your emergencies (emergency funds). If you opt to do this, make sure you have some other funds you can fall back on if needed. Otherwise, you may fall right back into more debt if an emergency arises and you have no immediate funds to tackle it.
Once you clear your card debts, avoid getting back to the same previous situation. Use more cash, if possible. But don’t stop using your credit cards completely, because you need them to build your credit still. However, use credit cards now only for what you will pay off in full each statement cycle.
Check Your Credit Report For Errors
Doing this regularly can help you catch a problem before it’s too late. If you find a discrepancy, open up a dispute with the credit report bureaus to iron it out, and remove every inaccuracy.
Don’t Open New Credit Accounts
Except it is absolutely necessary, don’t open new credit cards, store credits, or anything that may result in your credit reports being pulled. Each time your credit report is pulled for credit purposes, you stand the chance of losing anywhere from 8 to 30 points. So say a firm “NO” to those “30% of today when you open a credit card” store offers! Frequent hard inquiries are red flags on your credit report as it may indicate you have financial problems.
Watch Your Credit Card Utilization – Don’t Use Up Your Credit
Be careful and very mindful not to max out your credit limit. That, to creditors, is a serious sign of financial difficulties and negatively impact credit scores. About 10% of credit utilization, or less, is what you want to aim for. Actually, the lower, the better. If at all you exceed this, try not to go beyond 30% credit utilization. This is one of the factors used to calculate your credit score. It is simply measuring how much of your credit you have used up on your credit lines. If for example you have a credit card with $100, and you owe $50 on that, you have used 50%, and that will hurt your credit score, even if you have other credit cards with zero utilization.
Be An Authorized User
Find someone who is diligent in paying their credit bills on time, and ask to be an authorized user on their credit card. You don’t need to have access to their card. If you’re included on their account, you benefit from them paying their bills on time. Each time the credit card company reports activities on the card, it is recorded on your report as well. That way, you are seen as being consistent in paying your bills. This is particularly helpful if you have poor credit.
Keep Your Oldest Accounts Open
Sometimes in the bid to increase scores, people start to close their credit accounts. This may actually hurt your credit. The older a credit account, the better for calculating how long you have been actively using credit. This can make your credit score better as it is one of the factors driving credit scores. When you close older accounts, your credit history becomes shorter. It is far better to cancel the newer ones than older accounts.
Be Disciplined, Determined and Patient
Certain past occurrences like bankruptcy, foreclosures, tax lien, late payments, judgments, etc may have statutory expiration dates. In such cases, you must be disciplined and keep maintaining good credit habits and history while you wait for these to expire. If after the due dates, they are still on your reports, then you should contact the credit agencies to get such corrected, as getting them off will boost your credit score.
How Long Does It Take To Increase Credit Score?
The truth is there is no way to calculate specifically the time needed to increase credit score. This is because credit scores for each person can be said to be “customized” to each individual. It is possible to improve credit score in 30 days, or it may take longer. Each person’s credit history, terms, conditions, situations, and circ*mstances differ and will affect the time it takes to see the increase desired.
However, with careful planning and dedication, you can get your credit straightened in the shortest amount of time for your particular situation. In my case, I saw a very steep increase in credit score between January 2019 and February 2019. I went from a score of 595 to over 743 within 30 days, and 793 by March 2019! (see the screenshot below) I was shocked, to say the least! Again, your particular situation will determine the length of time it takes you. Conditions like recurring default, for example, may prolong your own process to raise your credit score immediately, the bottom line is once you set your mind to it and get a plan in place, it is doable.
I have aFREE Debt PayOff Planner Packavailable for download, that can help you with your debt payoff goals. It’s part of my “IF YOU BELIEVE YOU CAN, YOU WILL” Bundle. If you will like to have the FREE printables,click here.
I am sharing exactly how I achieved this in this other post. Click the image below to go to that post.
What ways have you used personally to increase your credit score in the past? Share with us in the comment section. Also if you have found this post informative, please PIN it, share it with your family and friends on social media…and don’t forget to share your thoughts below.
Till next time!
