The credit score dictates many different things for you, ranging from approval for credit cards to the interest rates that you are offered when you go for a mortgage. At the moment, because of the way in which the economy is affected by the coronavirus pandemic, we can expect people to need credit from banks and other institutions. Unfortunately, if your credit score is low, you will have problems getting a loan. You might get it from LetMeBank but your goal should always be to increase credit score as fast as possible. This can be done through different methods, like the ones presented below.
Clean Up The Credit Report
The first thing you have to do is to request your credit report from the 3 large nationwide reporting companies, like TransUnion, Experian, and Equifax. A free report can be offered to you every year. Get ready to save it on the computer or print it so you can carefully analyze it.
After the report is in place, you have to look at it. Be extremely careful with unpaid bills and late payments. When you find information that is inaccurate, you have to send an official dispute.
You need to keep your credit report clean. By removing the inaccurate entries, you instantly increase your score.
Pay Down Balances
FICO is the company that calculates the score that is mostly used by financial institutions. According to it, 30% of the score is based on how much you owe. However, the score is not just about how much is owed. It is also important to look at the credit you owe when compared to the credit you have. The ratio between these two is known as the credit utilization rate.
While many things are said about the perfect credit utilization rate, generally, you need to have it under 30%. When the rate is too high, you have to pay down as much of the outstanding balance as soon as you can to boost the credit score.
Make Payments Two Times Per Month
Most people believe that they do quite ok when they pay out the card every single month. Unfortunately, creditors just report balances once per month. If at the end of the month you have a large balance, it might seem that you overuse your available credit.
Alleviate the problems and increase your credit score by breaking up the credit card payments in 2 monthly payments. Charge the card to obtain rewards but when you make 2 monthly payments, the balance does not run low.
Increase Available Credit Limit
It is possible that you cannot pay the balances. If you want to increase credit score fast, you can increase the credit limit you have. For instance, when you have a $1,000 credit card limit and it the card is maxed out, increase the limit to double that amount. Just do not spend anything from the new credit you gain. This lowers the debt to credit ratio and is seen as a favorable move by reporting companies.
Negotiate The Outstanding Balances
Let’s say your score went down because there are bills that entered debt collection. This cannot be wiped out form the report. But, it is possible to do some fast damage control. You will not increase the credit score by much but it is going to be of help in the long run.
One thing that many do not know is that you can negotiate some parts of the debt. Whenever you do this though, you need a written agreement. There are also professionals that you can hire and that will help you to get better deals. Use their services.