Your credit score is something you typically don’t give much thought to until suddenly you want to apply for a loan, a credit card, get a mortgage, buy a car, or even sign a lease agreement for an apartment or condo. Suddenly that number which usually stays in the shadows is now drawn into the light and can either allow you to move forward with your goals or cause a roadblock.
Here in the United States, a poor credit rating is anything under 599, which statistics show 43.4 million people currently have. This is about 25% of Americans, so a fairly large chunk. There are all kinds of reasons a person can end up with a poor credit rating, with the most common being a failure to make bill payments in full and in a timely manner.
If you have just discovered that your credit rating is less than ideal and you want to boost it fast, here’s a look at ways you can actually increase it by 100 points overnight.
The first step you’ll want to take is to get your credit report and look carefully for any errors. By law, you are allowed one free report every year, so take advantage of this and see for yourself what is causing your score to be low. You want to keep an eye out for unpaid bills or late payments.
If you find any errors, you can send a dispute. If your dispute is shown to be true in your favor, those items will then be removed and your credit score will improve.
If possible, you will also want to pay any outstanding balances. Paying creditors off in full will mean that you’re using less credit, so your utilization level is lowered. Even if you can’t pay creditors off in full, making large payments (more than the minimum) will help a lot. If you are late on any payments, now is the time to catch up.
Some people find that paying creditors twice a month is a good way to stay on top of the bills and bring the balance down faster. This is a good rule of thumb moving forward.
While this may seem counter-intuitive, you can actually call and ask to have a credit increased, which will then bring down your utilization level since you are no longer maxed out. Of course, this will only work if you don’t turn around and instantly use all the new credit that you have been given. This is typically the fastest and most effective solution.
If you are turned down for a credit increase, you could apply for a new credit card and make sure that you stretch out your charging habits so no one card ever has a high balance.
In order to prevent yourself from winding up in the same position in the future, it’s best to stay on top of your credit report yearly, pay all your bills on time, and try to make additional payments whenever necessary.