How You Can Increase Your Credit Score in Less than a Year

How You Can Increase Your Credit Score in Less than a Year

Step 1: pay your bills on time

Your payment history is responsible for approximately 35% of your credit score more than any other factor. If you have paid bills late in the past, you must pay them on time. If you have missed payments, stay up to date and stay up to date. Payday Loans -  Every timely payment updates positive information to your credit report. The longer your history of paying bills on time, the higher that part of your credit score will be.

Step 2: Review your credit report

* Errors happen, so view your report up close for:

* Accounts that are not yours

* Accounts with the wrong account date or credit limit stated

* Names and social security numbers that are not yours

* Addresses where you have never lived before

* Negative information, such as late payments, older than seven years. (Late payments can only legally remain on your credit report for seven years.)

Under the Fair Credit Reporting Act, the three national agencies - Equifax, Experian and TransUnion - and your creditors are responsible for correcting errors in your report. The Federal Trade Commission (FTC) website contains detailed steps for correcting errors and a sample dispute letter. If you find accounts that are not yours and you suspect that you have been the victim of identity theft, you should post a fraud warning on your credit report, close those accounts and file a police report and a complaint with the FTC.

Step 3: Pay your card balances

The amount of debts that you have is heavily checked on your score. Your total reported debt due is taken into account, as well as the number of accounts with outstanding balances and how many available credits have been used. The total reported debt is compared with the total available credit to determine your debt / credit ratio. Your credit score can suffer if those numbers are too close together. Your best plan for reducing your debt is to make a plan to pay it off. Although it may seem a wise move, do not consolidate the debt on one lower interest card. Credit questions and opening new credits can lower your credit score, at least in the short term. If you close old cards with high credit limits, you can also reject your debt-to-credit ratio. If a new credit offer is too good to pass up, you have to keep your total credit amount high by not closing old credit cards.

Step 4: use credit

You must regularly use credit for creditors to update your credit report with current, correct information. Although paying with cash or a bank card can make it easier to keep track of a budget, a cash-only lifestyle does very little to improve your credit score. The easiest way to use credit is with a credit card, especially if you are trying to improve your score to qualify for an installment loan. If you have an old credit card, you must use it again in a responsible manner. A long credit history is a positive determining factor for your credit score, so making an inactive account active can be beneficial. Although you have to make a point to use regular credit, you only have to ask as much as you can pay. Keep your credit low so as not to damage your credit / credit ratio.

Step 5: check your report

If you keep a close eye on your credit report, you can see if your hard work is paying off. With credit monitoring you can keep track of the account activity. You will also be immediately informed about fraudulent activities. The credit bureaus and FICO offer credit control services, which usually cost around $ 15 a month to check all three of your credit reports and scores. You can also use Credit Karma or other free sites.

Step 6: If you shop for a loan, do it quickly.

This is a hack because of the delay between the money lenders and the 3 agencies.

When you apply for a loan, the lender will perform "your creditworthiness" - that is, send a question to one of the credit assessors to find out how creditworthy you are. Too many such questions can harm your FICO score, as this could mean that you are trying to borrow money from many different sources. Of course you can generate many questions that do something very reasonable --- such as shopping for the best mortgage or car loan by submitting an application to a number of different lenders. The FICO score system is designed to make this possible by examining the extent to which a series of questions is asked. Try to do all your loan purchases within 30 days, so that the questions are grouped together and it is natural for FICO that you lend to to pick up.