It’s important to note that improving bad credit is a bit similar to losing weight: It takes time and there is no rapid way to improve your credit score. Actually, out of all of the ways to advance a credit score, quick-fix efforts are the most likely to fail, so beware of any advice that states to improve your score quickly. The best advice for reconstructing credit is to manage it over time. If you haven’t done that, then you need to improve your history before you see improvement. The tips below provide Credit Score Solutions.
Follow Credit Card Balances
Follow your card balances. An impotent factor in your score is how much revolving credit you have compared to how much you’re actually using. The less that percentage is, the better it is for your rating. The average is 30 percent or lower.
What you might not consider is that even if you pay balances in full every month, you still could have a higher utilization ratio than you would think of. That’s because some issuers utilize the balance on your statement as the one disclosed to the bureau. Even if you’re paying balances fully every month, your credit score will still scale your monthly balances. One option is to see if your card issuer will accept several payments during the month. You can find more on financedoneright.com
Setup Payment Reminders
Remember to set up payment reminders. Making your payments on time is one of the largest contributing attributes to your scores. Some banks provide with payment reminders through their online banking platforms that can send you an email or text message reminding you when a payment deadline is. You could also consider engaging in automatic payments through your credit card and loan providers to have payments automatically used from your bank account, but this only makes the minimum payment on your cards and does not help engage a sense of money management.
You can pay twice a month. You might think you’re doing fine because you pay off your card each month, even if it’s maxed out. The issue is that your creditors are only disclosing balances to the credit bureaus once a month. If you hold a big balance each month, it could seem that you’re overusing your credit.
For instance, assume you have a credit card with a $4,000 limit. It’s a rewards card, so you use it for all you purchase. In fact, every month, you reach to your limit. The statement comes, you owe $4,000, and you send in a check to pay it off. The issue is the credit card company is likely reporting the statement balance every month. Thus, it looks like you have a $4,000 limit and a $4,000 balance. That’s a 100 percent credit usage rate, and not a preferable thing as far as your score is considered.
You can help ease the problem by dividing your credit card payments. Start charging everything to get the rewards, however, send in payments at least twice a month to sustain your running balance lower. Moreover, if you make a big purchase on your card and have the cash nearby, pay it off immediately.
Decrease the amount of debt you owe. This is easier said than done, however reducing the amount that you owe is going to be a far more enjoyable achievement than advancing your credit score. The first thing you need to do is stop purchasing with your credit cards. Use your credit report to make a list of all of your accounts and then go online or go through recent statements to determine how much you owe on each account and what interest rate they are charging you. Think of a payment plan that puts most of your feasible budget for debt payments towards the highest interest cards in high priority, while maintaining minimum payments on your other accounts.
Get and Stay Present
If you have missed payments, get present and stay present. The longer you pay your bills on time after being late, the more your FICO Scores should advance. Older credit issues count for less, thus, poor credit performance won’t harm you forever. The influence of past credit problems on your FICO Scores disappears as time passes and as recent good payment trends show up on your credit report. And good FICO Scores weigh any credit issues against the positive information that says you’re governing your credit well.
Perhaps you’re not in a situation to pay down your balances. You could take a different way to improving your credit utilization rate: approach your creditor and ask for a credit limit increase.
If you’ve maxed out your $4,000 card and get a limit increase to $8,000, you’ve immediately cut your credit utilization rate in half. The important factor is to not spend any of your new credit. It blows the purpose of getting a limit increase if you instantly charge the card up to $8,000.
Try to become an authorized user. Once you’re an authorized user, the account will show up on your credit report if a card has been issued in your name. Afterward, your credit report will show all the cardholder’s on-time payments and (hopefully good) credit utilization rate. Thus, your credit score gets an increase too.
At the end of the day, if none of the offerings helps you, don’t be upset. There is one final option, and that is to be joined as an authorized user on someone else’s credit card.
Now, for this to happen, you’ll need to find someone who trusts you very much and who governs his or her money very efficiently. Once you find this very significant person who is going to do you a big favor, you need to relax and hope to die while explaining you have no goals of exploiting their credit card. You just want to be added to their account as a way to construct credit.
While these several strategies can increase your credit score fast, keep in mind that “fast” is an approximate term. You won’t see results in one day; give it several months or so for the changes to begin influencing your score positively.
You can read additional materials on how to improve your credit score on several other articles on this website.