There are certain risk factors that can help you better understand the necessary actions you can take to improve your credit score quickly.
Some of
these include:
Your
payment history
Credit
utilization rate (ratio)
These two
key factors combined represent an average of 70% of your credit score, and
understanding how they work will play a critical role in improving your credit
score faster.
Here are 5
simple steps you can take to help boost your credit score, using the two stated
factors:
#1: Early Payment of Bills
A delay in the payment of bills will make you less creditworthy to lenders, which in turn reduces your credit score.
Lenders are always very interested in how reliable you are in the payment of your bills, and this is one of their central interests whenever they request your credit score.
This is
because lenders tend to rate past payment performance as a good predictor for a
borrower’s future performance.
This goes way pass your regular credit card debt or any loans incurred (such as student or car loans), it also reflects in how quickly you make payments on phone bills, utilities, rent, and others.
So, one very
good way to improve your credit score quickly is to start paying bills on time,
as this positively influences your credit rating with lenders.
One good way
of ensuring that you never miss out on a bill payment is by using available
tools to automate the payments for you and ensure that you are always on time
every month.
#2: Taking up Payday Loans Alternative
Online
payday loans are an excellent choice for funding, especially if you’re looking
not to tamper with your credit rating.
This is so
because statements on this kind of loan are generally not reported back to the
three major credit reporting bureaus (Equifax, Experian, and TransUnion).
So, instead
of going for one of the regular loan programs that could potentially hurt your
credit score rating, you could rather go for a payday loan.
And the best
part?
Guaranteed payday loan companies like InstantPaydayNV do not conduct a credit check as a requirement to get your loan request approved.
But you must understand – payday loans Nevada do not have any effect on your credit score rating… That is, they neither increase nor decrease your credit score; they are just there to keep you going while you are on your journey to fixing your credit rating.
#3: Report any Errors in your Credit Report
It’s always
important to constantly check your credit score rating on all of the three
credit reporting bureaus (Equifax, Experian, and TransUnion) for any errors.
False
information on your credit report could reduce your credit score by a lot. So
it’s always important to confirm the accuracy of the accounts listed on your reports.
And if you
come across any inaccuracies in your report, ensure that you dispute it as
quickly as possible, to have it corrected.
Checking on
your credit regularly is one good way of improving it because it can help you
detect any inaccuracy before they can do further damage to it.
#4: Ensure Low Balances on Credit Cards
As stated earlier, the credit utilization ratio is an important factor that plays a critical role in the calculation of your credit score.
This is done by adding up all balances on your credit card at a given period of time and then dividing that amount by the total limit of your credit.
For example,
if you typically charge about $1,500 monthly and the limit of your credit
across all your credit cards is $7,500, your utilization ratio is 20%.
In order to
calculate your average credit utilization ratio, you have to first go through
all your credit card statements from the last 12 months (one-year).
Then sum-up
the statement balances for every month across your various credit cards and
divide it by 12. This will give you a pretty good overview of how much credit
used monthly.
The importance of knowing your credit utilization ratio is that lenders always love to see credit utilization ratios of at least 30%.
And
generally, borrowers with really good credit scores often have very low credit
utilization ratios.
The credit utilization ratio is one factor that helps lenders better understand whether or not you have maxed out your credit cards, and as well how to deal with the credit well.
The best
ways to positively influence your credit utilization ratio include:
Payment
of debt
Regulate
your credit card balances, keeping them as reasonably low as possible.
Being
an authorized user on a different
credit account.
Becoming an
authorized user can be a great way of improving your credit report, especially
if you are added to an account that is always quick in making payments.
#5: Keep your Unused Credit Cards Open
This is a
really smart strategic way of decreasing your credit utilization ratio.
As long as
you won’t be spending on annual fees, keep your unused credit cards open.
Conclusion
Yes, it’s
possible to get your credit score higher in rating in a matter of weeks, but
all these can only be established if you:
Always
check your credit report for errors to get it rectified
Pay
bills when due
Pay
off credit card debt and other collective accounts.
Now I’d Love to Hear from You:
How long did
it take you to improve on your credit score rating?
Or maybe you
are finding it really difficult dealing with issues with your credit report?
Either way,
let me know by leaving a comment below!