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Are you trying to raise your credit scores fast?
Unfortunately, theres no silver bullet thatll raise your credit scores overnight. But there are a few ways you might be able to improve your credit over time if you manage your credit well.Working on your credit? Check My Equifax® and TransUnion® Scores Now
- The truth about raising your credit scores fast
- Tips that can help raise your credit scores
- Pitfalls to avoid when working on your credit scores
The truth about raising your credit scores fast
While a lucky few may be in a situation where they can raise their credit scores quickly, the bottom line for most of us is that building credit takes time and discipline, especially if youre trying to rebuild bad credit. Thats because your credit scores are complex and made up of several interconnected factors (more on that below).
So trust us: While some credit repair agencies may promise to raise your credit scores fast, theres no secret that will help boost your credit scores quickly.
But if you start developing healthy habits now, you can build credit over time all by yourself.
5 factors that affect your credit scores
As we mentioned above, there are several factors that go into determining your credit scores.
- Payment history makes up the biggest chunk of your credit scores. Thats why its so important to make on-time payments each month if at all possible. Late payments can haunt your credit history for up to seven years.
- Credit usage, or credit utilization, is another important factor. This measures how much of your available credit you tap into at any given time. Experts recommend you keep this to less than 30%.
- The length of your credit history has some impact on your credit, though not much. This factors in the ages of your oldest and newest credit card accounts, as well as the average age of all your accounts. The older your credit, the better, because it shows lenders you have more experience managing credit.
- Your credit mix has a small impact on your credit. This looks at the types of credit you borrow. Lenders want to see that you can balance revolving accounts like credit cards with installment accounts like mortgages, student loans, auto loans and personal loans.
- Your recent credit also has a small impact on your credit. This tracks the applications you file for things like new credit cards and personal loans with hard inquiries. The fewer, the better.
Tips that can help raise your credit scores
Because credit is so complex, building credit takes time. Depending on your individual situation, there may be ways to raise your scores quickly like paying down all your debt in a very short span of time. But if youre starting out with bad credit, even a drastic measure like that may not have the immediate effect youre looking for. No matter what, the most impactful thing you can do for your credit is to create some consistent habits. Here are some tips that can help you raise your credit scores over time.
1. Check your credit reports on a regular basis to track your progress
No matter where you turn for your credit check-in your bank, Credit Karma or one of the major consumer credit bureaus its important to keep an eye on your credit. And if you find any mistakes or inaccuracies, we can help you file a dispute. If your dispute is approved by the credit bureaus, you may see the error corrected as soon as within 30 days, which can help raise your credit scores.
2. Sign up for free credit monitoring
Whether its with Credit Karma or someone else, keeping a close eye on your credit is essential. Signing up for credit monitoring can help alert you to important changes in your credit, so that you can check for suspicious activity. Fraudulent activity can weigh down what could be an otherwise good credit score, so its important to dispute any details you identify as inaccurate. If the credit bureau rules in your favor, the fraudulent activity will be removed from your credit report, which can help raise your credit scores.
3. Figure out how much money you owe
Gather all your bills and come up with a plan to pay them off. The snowball method focuses on paying off the lowest balances first, while the avalanche method focuses on paying off the balances with the highest interest rates first. If you have too many credit cards to keep track of, you could also consolidate your credit card debt into one balance transfer card to make it easier to manage your monthly payments. All three strategies could help you pay off your credit card debt more quickly, lower your credit utilization ratio and raise your credit scores. So, choose the plan that works best for you, and stick with it.
4. Set up autopay, so you never forget to make a credit card payment
This could help you develop a consistent payment history over time. It might not help you raise your credit scores fast, but it could protect your scores from declining fast, which will likely happen if you miss a payment.
5. Pay twice a month
Instead of making one big payment at the end of the month, try splitting it up into smaller payments every two weeks. This could help you sneak in a few extra payments each year and save money on interest charges. And the extra payments can help pay down your principal balance faster, lowering your account balances and credit utilization ratio, which can raise your scores.
6. Negotiate a lower interest rate
A lower rate can help you pay off your balance faster, because more of your payment can be applied to your principal balance than interest. Lower balances can mean a lower credit utilization ratio (and a lift in your scores). Learn more about how to negotiate a lower interest rate.Working on your credit? Check My Equifax® and TransUnion® Scores Now
7. Ask for a credit limit increase
A higher credit limit is another way to help reduce your credit utilization ratio, which can help raise your credit scores. Keep in mind though that some credit issuers do a hard credit check when you request a credit limit increase, and that can cause your credit to dip. Read up on how to ask for a credit limit increase.
8. Mix it up
Your credit mix refers to the various types of accounts included in your credit reports. While it probably wont make or break your credit scores, lenders typically like to see a mix of revolving credit accounts (i.e., credit cards) and installment loans, like mortgages, auto loans and student loans. The more you diversify the money you borrow, the better. Of course, its not a good idea to take out a loan you dont need just for the sake of adding some extra color to your credit mix.
9. Become an authorized user on someone elses account
If youre new to credit and cant qualify for your own credit card, becoming an authorized user on someone elses account can be a great way to get started. But its a double-edged sword: If the person who owns the account has healthy credit, it can help you establish a positive credit history over the long run. On the other hand, if they miss payments or carry high credit card balances, that could also reflect poorly on you. Thats why its important to pick someone you trust who has a longer credit history and higher credit scores than you do, and who overall has a positive credit history.
Pitfalls to avoid when working on your credit scores
When it comes to building credit, its easy to get overly focused on ways to raise your credit scores fast. The truth is that building credit takes time. So take a step back and make sure your strategy doesnt do more harm than good.
Here are a few donts to keep in mind.
- Dont apply for a bunch of new credit cards just because you want to increase your credit utilization. Even though this might help lower your credit utilization ratio, it could also make you look like a risky borrower thanks to the new hard inquiries on your reports.
- For the same reason, dont take out a loan just to improve your credit mix. Only apply for a new loan if you actually need it.
- Dont carry a balance on your credit card just so you can build credit. Carrying a balance can lead to unnecessary interest charges, and it might actually hold your scores down by increasing your credit utilization ratio.
- Dont cancel your credit card after you pay it off unless you have a good reason to do so. Closing your credit card will hurt your length of credit history, so its better to leave it open, even if youre not using it anymore. Of course, if having a card tempts you to spend more, or it comes with an expensive annual fee, you might want to rethink this conventional wisdom.
There are a lot of credit repair companies out there that promise to raise your credit scores fast. Be wary. Rebuilding your credit scores takes time, and you can help improve your credit by yourself.
There are a few steps you might be able to take to raise your credit scores relatively quickly, like paying off credit cards with high balances and disputing errors. But for the most part, it takes time and patience to build credit.Working on your credit? Check My Equifax® and TransUnion® Scores Now
About the author: Tim Devaney is a personal finance writer and credit card expert at Credit Karma. Hes a longtime journalist who prides himself on being a good storyteller who can explain complex information in an easily digestible wa Read more.
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