There are lots of important numbers that can determine your potential success. The most important number from a financial perspective is your credit score. Most people associate a high credit score with someone who is responsible and trustworthy. That’s why so many lenders require a good credit score to make loans – whether that’s for a car, a home, or a business venture. Landlords and employers may also look at your credit score to determine what kind of renter or employee you’ll be.
If your credit score isn’t as high as you want it to be, there are several different ways to bring it up. And if you need to focus on how to get your up fast, these are the best strategies to use.
Fix any errors on your current credit report
As many as 1 in 5 people have a mistake on their credit report that may negatively affect their credit score. So take a look at your most recent credit report, paying attention to any details. If you find a mistake, you should file a dispute right away with the credit bureau to get the error corrected. That way, your credit score will be more accurate.
Make Automatic Payments Whenever Possible
Approximately 35% of your credit score is calculated from your past payment history. That means that every late payment counts against you in a big way. To avoid missing a payment, set up automatic payments for all your accounts. Credit cards, utilities, and loan payments can almost always be set up automatically. And if not, you may still be able to set up automatic payments through your bank.
Not only will automatic payments help you build a spotless payment record, it will also give you peace of mind. No more worrying about whether you remembered to pay a bill or keeping track of multiple due dates. Just set up automatic payments, kick back, and watch your credit score rise.
Transfer Credit Card Balances
If you feel like you’re buried under mountains of credit card debt, a helpful strategy is to use a balance transfer credit card. This allows you to transfer your balance to a card that will give you an introductory zero percent interest period. With high interest out of the way, you can focus on paying down your credit card balances and boosting your score by owing less.
This is a great strategy if you feel like your current credit card interest is holding you back. But be warned – if you feel like you have to use this strategy more than once or twice a year, your real problem is probably overspending.
Keep Your Accounts Active
Most people are surprised to learn that having more accounts is actually a good thing when it comes to your credit score. The catch is that you want your accounts to show a positive history. So don’t close out any accounts, even credit cards that have been paid off. Each month of positive payment history will be beneficial to your credit score. The best strategy is to use those cards once or twice per month, and then pay them off right away. This will keep your credit score ticking up over time with almost no extra work for you. Or, if you really think you’re at risk to overspend, take the card out of your wallet but keep the account open.
Request Credit Increases
Part of your credit score is calculated based on how much of your credit you actively use. So one of the fastest ways to increase your credit score is to request an increase of your existing credit limits. Most credit card companies let you do this once or twice per year. You can either go online or call the company and request an increase of your credit limit. The impact can be huge for increasing your credit score.
For example, if you maxed out your $2,000 card and get a limit increase to $3,000, you’ve instantly cut your credit utilization by 33%. They key to this strategy is to continue paying off your balance and not to let your credit increase tempt you to spend more.
The Bottom Line
As you focus on how to get your credit score up fast, focus on developing healthy financial habits. Even habits like sticking to a budget can give you more financial stability. This will help you continue to increase your credit score over time. Even if you’re starting from a low point, don’t get discouraged! It’s always possible to increase your score, no matter how low it starts.
