Outside of respect, when you are looking for someone to give you a little credit, it can be a bit of an undertaking. So many things affect your credit score that you may or may not be aware of, yet getting a good credit score quickly may not be as out of reach as you think. To improve your score, there are several very achievable steps you can take.
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How To Improve Your Credit Score in 30 Days
If you are looking to secure a loan, make a big purchase or just get a type of credit score that gets you places, it doesn’t take as long as you may think. When you check your credit score, you’ll see that it can fluctuate greatly from month to month, depending on several factors. If you’re wondering how to increase your credit score in 30 days, here are eight tips to help you get started:
Check your credit report
Open a secured credit card
Pay your bills on time and consistently
Avoid multiple credit inquiries
Keep your credit utilization ratio low
Keep old credit card accounts open
Become an authorized user
Make sure you have no paid-off negative entries
1. Check Your Credit Reportand Credit Score
It may seem obvious, but the first step to improving your credit is to know what score you have and how you can work with it. If you are trying to improve your credit score from 650, which is considered fair credit, to 700, which is considered good credit, you have to analyze your credit mix and other factors that affect your score.
You can get a free copy of your credit report from each of the major credit reporting bureaus once a week.You can go to AnnualCreditReport.com to download your report and choose from Equifax, Experian and TransUnion. Although these free credit reports do not include your credit score, they show you all of the data used to calculate your credit score.
You can also request free access to your credit score from your credit card provider or bank.
2. Open a Secured Credit Card
A good place to start is applying for a secured credit card or beginning card with a low limit so you can’t spend more than you are able to pay for, which can contradict improving your score. This isn’t a card to use daily but one you can use to pay for a few things here and there to build your credit steadily, especially when you make timely payments on your credit card balance. This alone can boost your credit score within a month.
3. Pay Your Bills on Time and Consistently
Without a doubt, the No. 1 thing you can do to improve your credit and avoid paying higher interest rates is to pay your bills on time and consistently. No matter if it is an auto loan, chipping away at credit card debt or paying back your student loans, doing so every month on time will be a key factor in improving your creditworthiness.
On time is great, but early can be even better. Here are a few key takeaways:
To save on interest costs in the long run, pay more than the minimum payment to your credit card issuer on your credit card bills.
If you’re only making minimum payments on a loan, then you’re strictly paying toward the interest, not the principal.
Setting up automatic bill payments can help you get into the habit of paying off debt regularly and improve your score without having to think about it.
4. Avoid Multiple Credit Inquiries
When too many hard inquiries are pulled within a short period of time, it can harm your credit score. Here are a few things to consider with credit inquiries:
FICO bases 10% of a credit score’s weight on new credit, typically attributed to lenders making hard inquiries into a borrower’s credit history.
Hard inquiries are where you permit lenders to view your credit report, but multiple hard inquiries within a short time frame can lower your score, so be selective.
5. Keep Your Credit Utilization Ratio Low
The amount of your current revolving credit usage divided by the total amount of revolving credit available to you is known as your credit utilization rate or ratio. In other words, it is how much you owe divided by your limit. Credit utilization makes up about 30% of your FICO score, so it is important to keep the percentage low to show you can manage your finances well.
6. Keep Old Credit Card Accounts Open
It may be tempting to close all of your credit card accounts to get a better handle on your situation, but this isn’t always the best move. Here are a few ways closing old or never-used credit card accounts might hurt your credit score:
You could lessen your creditworthiness or even your score by closing out an old credit card account, as this reduces the average age of your accounts or the length of your credit history.
If you close an old credit card account, you could also reduce the amount of your available credit, which potentially increases your overall credit utilization ratio.
7. Become an Authorized User
Sometimes it helps to ask a friend or family member who has excellent credit if you can become an authorized user on one of their existing credit card accounts. Depending on how quickly they can do this, it could increase your score within 30 days, but if not that quickly, you’ll definitely see a boost in the next billing cycle. This takes a lot of trust, so be sure you don’t take advantage of this situation so as to not damage their credit score.
8. Make Sure You Have No Paid-Off Negative Entries
Once you know both your credit score and credit history, you can then double-check that you have no debts listed on your credit report that you have already paid off. This isn’t uncommon, but easily fixed, and removing negative entries from your credit report can increase your credit score quite quickly.
To do this, you can ask the credit bureaus to remove them. Just be aware you have to have proof you have paid off the debts in question.
Final Take To GO
There is no way around the fact that good credit just serves you better in whatever financial moves you try to make in your future. Taking simple steps now can not only improve your credit score but can also make you a more desirable applicant for loans. By following these tips, improving your credit score in 30 days is well within your control.
This article originally appeared on GOBankingRates.com: How To Improve Your Credit Score in 30 Days
