How to Improve Your Credit Score Fast

How to Improve Your Credit Score Fast

March 21, 2013         Written By Justin Hefner

Many people experienced a decline in their credit scores after the economy crashed in 2008. The loss of a job or skyrocketing expenses can easily send your credit score from the 700s into the 600s. Credit scores can go down quickly, but they don’t always increase at the same rate. Nevertheless, there are a few things you can do to boost your credit score in a timely manner.

Here is a guide explaining how to improve your credit score fast.

Identify the Problem

You can’t repair your credit if you don’t know what is wrong with it in the first place. That’s like going in for surgery without first seeing a doctor. Take a look at your credit report and figure out where things went wrong. Did you get too far behind on your payments? Did you build up too much credit card debt? Did you have something repossessed or foreclosed? Only when you pinpoint this problem will you be able to take the necessary steps to correct it.

Once you know what you need to fix, you can follow the applicable suggestions below to regain your financial ground.

Bring Down Your Balances

Most people don’t realize that having high credit card balances can hurt their credit score. One of the key factors that goes into your credit score is the amount of debt you have in comparison to your available credit. You need to keep this ratio below 30% to not affect your credit score. That means if you have $10,000 in money available through your credit cards, you should have a balance of $3,000 or less.

Start looking at each line of credit carefully and figure out which ones need to have lower balances. The ratio mentioned above applies to each card, not all of them together. That means that in the above scenario, you’d still have problems if you had a $3,000 balance on a $3,000 card, even if you have no balance on any other cards. Do a little math so you know which cards to pay off first.

If you can’t pay your balances…
Try to transfer the balance to another card. You may have to pay money in balance transfer fees, but doing this will allow you to lower your ratio. If you pushed $2,200 of your $3,000 balance onto empty cards, you’d be able to reduce everything to a point that your score may increase. All you have to worry about after that is the interest you pay.

Make Your Payments on Time

The quickest way to reduce your credit score is to start missing payments. Most businesses will not report a payment until it is 30-90 days past due. If you have any bills that are about to approach that mark, get them taken care of immediately. Also, if you have accounts that you have been consistently behind on, get them caught up so you don’t continue to build up bad credit. This is more of a preventative measure, but it will show positive payment history on your credit. That in turn could increase your score.

Reconfigure Your Debt (Consolidate or Refinance)

Debt consolidation is a great option for saving money and improving credit scores. With this, you essentially compile all of your debts into one loan or card and then make payments on that one account. Keeping track of the payments is easier because you only have one bill to think about, so this reduces your chances of missing a payment in the future. If you manage to get a loan or card with a low interest rate, you could also save yourself a lot of money in interest payments by doing this. Not all people qualify for debt consolidation, so you will need to explore the options available to you.

Stop Applying for New Credit

Your credit score will go down if you send out a lot of applications in a short period of time. Rather than trying to get as many credit cards as you can, stick with whatever you have now and let your history build. Once you have several months or years worth of on-time payments and low balances, your credit score should improve. The longer you maintain this, the better off you will be.

Some people will try for new cards for debt consolidation or bill reduction, which is perfectly understandable. Just note that each time a company pulls your credit, you get a mark on your report. Rack up enough marks, and you’ll lose whatever benefits you expected to gain after the applications. Try to spend time thoroughly assessing your loan and credit options before applying for something you don’t qualify for. The more careful you are, the better your chances are of maintaining your score.

Just Wait

We’d love to tell you that your credit score will transform over night, but that isn’t going to happen. Most adjustments in your score will take at least 30 days to show up, but some could take six months or more. Now that you know how to improve your credit score fast, start taking action right away. Time wasted means more time you will wait to see a difference. Be patient, and learn to manage your money well in the meantime. You’ll soon develop habits that are sure to increase your credit score.

The information contained within this article was accurate as of March 21, 2013. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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About Justin Hefner

Justin Hefner is in the education field and has written about a number of financial issues. He holds a Bachelor of Arts degree from Texas Tech University and a Masters in Education from Texas State University.