How to Improve Your Credit Score (And How to Do It Fast!)
More than half of all Americans have been turned down for some type of funding due to a bad credit score. Waiting until you need a loan or mortgage is too late to discover your score needs improvement.
A bad credit score is anything below 649. If your credit score falls within this range, don’t panic. There are steps you can take to improve your score and help guarantee that you’ll never be denied funding again.
Keep reading to learn a few simple tips to help you improve credit scores quickly.
Dispute Any Errors
Wondering how to improve credit scores in a fast and easy way? Then you should start by reviewing your credit report.
Your credit report will list all your current and past debts, along with your payment history and remaining balance. Your score is then calculated by the following:
- 35% accounts for payment history
- 30% accounts for amounts owed
- 15% accounts for the length of credit history
- 10% accounts for credit mix
- 10% accounts for new credit
To ensure that you’re getting the best score possible, take a look at all of your accounts listed. Look out for accounts that you did not open or inaccurate reports of late or missed payments.
If you find an error, you’ll need to dispute it to have it removed and improve your score. You’ll need to contact the credit bureaus, tell them what the error is, and provide them with any evidence you have.
Take Out a Small Loan
If there aren’t any errors on your report and your credit score is still bad, there are other steps you can take.
Many people have bad scores because they don’t have enough of a credit history to build it up. If this is your care, you should consider taking out a small loan. By merely opening a new account, you’ll help the new credit and credit mix aspects of your score.
If you’re interested in this method, read more about the effect it has before committing to a loan.
Set Up Automatic Payments
The best way to improve credit scores is to be consistent with your debt payments. Even just one missed or late payment can negatively affect your score for years.
To avoid this and improve your payment history, consider setting up automatic payments. That way, each month your debts will be paid on time and your score will rise.
This method will take some time to improve your score, but it’s an important step if you’re aiming for a good score instead of just a fair score.
Improve Credit Scores Using These Tips
After reading this article, it’s time to take charge of your financial future. Use these tips to improve credit scores today.
Start by reviewing your current credit report and disrupting any errors. From there, you can take out a small loan to help boost your credit history. Also, consider putting all your debt payments on auto-pay to avoid any negative effects on your score and improve your payment history.
Looking for more ways to improve your finances? Head to the Money section of this site to find all the best financial advice.