How to Improve Credit Fast
No one thinks about their credit until they need it. Frequently the though of paying that bill tomorrow, only to forget it completely, strikes a hidden negative rating upon you personally and your trust-worthiness from a banks point of view and taking upwards of 7 years to clear.
But their is hope and a way of fixing this negative rating and thus being able to buy the car, get the house or apply for a equity line of credit, is no longer a problem.
1. Pay credit card balances strategically
How much of your present credit line you use is called your credit utilization. As a general rule less than 30% of your limit on any card, but lower is better. The highest scorers tend to have credit utilization in the single digits.
You will also want to make sure your balance is low when the card issuer reports it to the credit bureaus, because that’s what is used in calculating your score. A simple way to do that is to pay down the balance before the billing cycle ends or to pay several times throughout the month to always keep your balance low.
Impact: Highly influential.
Your credit utilization is usually the second-biggest factor in your credit score; the biggest factor is paying on time.
How fast can it work: FAST
As soon as your credit card reports a lower balance to the credit bureaus, that lower utilization will be used in calculating your score.
2. Ask for higher credit limits
When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit. If your income has gone up or you’ve added more years of positive credit experience, you have a decent shot at getting a higher limit.
Before you make this request, plan how you’ll keep your spending habits steady and not max out that extra available credit. If those higher limits are a temptation, this might not be the best strategy for you.
Impact: Highly influential.
With a greater credit line, your proportions of used credit reduces.
How fast can it work: LOW
Getting a higher limit can take time and it is a catch 22. You want a better limit and yet your credit rating influences it.
3. Become an authorized user
If a relative or friend has a credit card account with a high credit limit and a good history of on-time payments, ask to be added as an authorized user. The account holder doesn’t have to let you use the card — or even give you the account number — for your credit to improve.
Make sure the account reports to all three major credit bureaus (Equifax, Experian and TransUnion) to get the best effect; most credit cards do.
Impact: Potentially High.
With a greater credit line, your proportions of used credit reduces.
How fast can it work: FAST
As soon as your are added, your credit is instantly improved.
3. Become an authorized user
If a relative or friend has a credit card account with a high credit limit and a good history of on-time payments, ask to be added as an authorized user. The account holder doesn’t have to let you use the card — or even give you the account number — for your credit to improve.
Make sure the account reports to all three major credit bureaus (Equifax, Experian and TransUnion) to get the best effect; most credit cards do.
Impact: Potentially High.
With a greater credit line, your proportions of used credit reduces.
How fast can it work: LOW
if you are a credit newbie with a thin credit file. The impact will be smaller for those with established credit who are trying to offset missteps or lower credit utilization.
4. Pay bills on time.
No strange mystery here. Paying your bills on time or before, improves you trustworthiness in the eyes of a bank. A simple way to do this, is to schedule payments from your checking account, at least paying the minimum and follow up with an extra payment in the month..
Impact: High.
Your payment record is the largest factor in your credit rating.
How fast can it work: LOW
Previously missed payments stick around for up to 3 years and are removed after 7. But no matter what your past record is, the more on-time payments you make, the higher your rating goes.
5. Dispute credit report error
Impact: Varies.
Your payment record is the largest factor in your credit rating.
How fast can it work: Varies
It takes a lot of time going through each of the reports and calling the companies claiming the problem..especially if it went into bill collections. Whether it was you or not, the time required to remove it, is considerable. It may take 45-90 days to resolve.
6. Deal with collection accounts
Impact: Varies.
An account in collections is a serious mark on you. If the collector stops reporting, because you paid the demanded amount. it help.
How fast can it work: Medium
On credit scores that ignore paid collections, such as VantageScore and newer FICOs, as soon as the paid-off status is reported to credit bureaus it can benefit your scores.