Let’s face it; your credit score determines pretty much everything from whether your credit card request will be approved to the rate you’ll be offered on that mortgage.
The economic recovery from the Great Recession has been evident, and this has enable most Americans to get on the right footing. While the average FICO score hit a new high in 2017, most of the consumers (20 percent) had “bad” scores, which means below 600. If you’re one of them, this is the right time to boost your credit score. Here are tips for fast credit repair.
1. Clean up the credit report
Before attempting anything else, visit AnnualCreditReport.com and request credit reports from the countries major credit reporting organizations: TransUnion, Equifax, and Experian. The law requires you to access one free credit report a year. After requesting it, you should save it on your computer or print a copy.
After accessing your credit report, go through everything, and pay attention to those accounts that show unpaid bills or late payments. If those details are erroneous, the report should indicate to you where to submit a dispute.
A clean credit report isn’t just essential for a good credit score. It may also have an impact on your job prospects. Certain employers may look at credit reports before hiring new staff. So, as you can see, cleaning up your credit report is fast credit repair tip. In case you find it hard to go about it, remember to seek help from a reputed credit repair company.
2. Pay your balance
A report from FICO, a company that computes one of the most commonly used credit scores, thirty percent of your FICO score depends on the amount owed. But, it’s not only what you owe that matters most. It’s the amount you owe compared with your credit limit; the ratio is referred to as credit utilization.
For instance, if you’ve a $8,000 credit limit and a $4,000 balance, your credit utilization will be 50 percent. However, if you’ve maxed out the $4,000 limit, your utilization becomes 100 percent. Many theories have been put forward regarding the best utilization level. But, according to Experian, a rate of below 30 percent is recommended. In other words, if you’ve a $10,000 limit, don’t be charged over $3,000 at any time.
If the amount you owe is higher than that, a quick way to boost your score is to pay down your balances. You can live lean for a couple of months, find a temporary second job or hold a garage sale to find the extra cash to drop the credit card balances.
3. Increase the credit limit
You’re possibly not in a position to pay down all of your balances. What if you took a different strategy to help improve your credit utilization rate? Call the creditor and ask for an increase in credit limit. If, for example, you maxed out a $1,000 card and receive a $2,000 as limit increase, you’ve successfully cut the credit utilization rate in half. The catch is to not spend the new credit. If you charge your card immediately up to $2,000, it will defeat the purpose of obtaining a limit increase.
4. Pay twice a month
Paying off your card each month is good, but not good enough. Well, the problem is your creditors only report balances to the credit bureaus once per month. Therefore, if you run a huge balance every month, it might look as though you’re overusing the credit.
Let’s assume your credit card has a $2,000 limit; being a reward card, you may want to use it for nearly everything. Each month, you hit the limit and the statement comes showing you owe $2,000. You send a check to pay that off. However, chances are, the credit card company reports the statement balance every month, making it look like you’ve $2,000 balance and $2,000 limit, which amounts to 100 percent credit utilization rate.
To eliminate this problem, break up the credit card payments. Charge everything to gather rewards, but be sure to send in payments twice a month so you can keep the running balance lower. Besides, if you use your card to make a large purchase and have the cash with you, pay it off quickly. Try out this fast credit repair trick or you can also. . .
Negotiating with your creditor is another fast credit repair strategy. If, for example, you were unemployed the previous year, you can’t deny the fact that you ceased paying the credit card bill. However, you may ask creditors to consider “erasing” the debt or any other amount that might have gone to collection. Draft a letter and in it, offer to pay the balance if your creditor will agree to report that account as “paid as agreed” or possibly even remove it. Note that you should get your creditor to make a written agreement before you make that payment.
Let’s suppose you were once a pretty good Visa customer until unemployment came knocking on your door, and you made one or two late payments, and they now appear on your credit report. You should draft a letter to Visa and in it, emphasize on your previous impressive history, then request them to remove the oopsies from your credit report. Try it. It could happen for you. And if your creditor won’t give a nod to your request, you may ask to . . .
6. Become an authorized user
If none of the above fast credit repair tricks work, you should find a loved one who knows how to manage their money effectively. Once you come across the person, let them know you don’t intend to use their credit card. Instead, tell them you would like their hand in rebuilding your credit and would like them to add you to their account.
You see, as an authorized user, their account will appear on your credit report, and the credit report will show the timely payments of the primary cardholder and hopefully their utilization rate. The outcome is your credit score will get a boost too.
While the above strategies can boost your credit score fast, note that the word “fast” is relative. You may not see the results overnight; you should give it at least three months for the changes to start having a positive effect on your credit.
Need professional help to boost your credit score?
At Alex Miller Credit Repair, we’ve helped thousands of customers to dispute, remove inaccurate entries from their credit reports, and improve their credit score as a result. Contact us online today for a free consultation or call one of our credit repair specialists directly at 877-503-9737.