5 Ways to Increase Your Credit Score Quickly

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As you prepare to take out a new loan or mortgage, you will be thinking about your credit score. The higher your credit score is, the better your interest rate on the loan will be. This is important as a lower interest rate means saving yourself a significant amount of money over the life of the loan. To increase your credit score fast, here are 5 of the best steps to take.

5 Ways to Increase Your Credit Score Quickly 1

Photo by Horia Varlan via Flickr

1. Check Your Credit Reports

Your first step in this process will be to pull your own credit report and check what is being reported. This will tell you whether you need to make some improvements or fix some errors. If there are negative reporting errors, having these taken care of will increase your credit score. Here is an article that will walk you through how to disput credit report errors.

Remember there are three major credit reporting agencies and each has their own credit report. You can get one free report from each agency per year through AnnualCreditReport.com.

2. Pay Down Your Debt

If you can do it, making a larger than normal payment on your debt is a great way to increase your credit score. The lower percentage of debt to available credit (called credit utilization), the better. If you can bring your percentage of debt to less than 10% of your available credit, you will ensure the best possible credit score.

3. Keep Your Accounts Open

If you are looking to raise your credit score, it is best to pay off a credit card but keep the account open. Your history with credit cards is extremely valuable, and the longer your history, the better your credit score will be.

Another reason to keep you raccounts open is to maintain your line of credit and keep the overall credit utilization low. When you close your account, your credit score get hit twice — so be careful!

4. Contact Your Creditors

If you have been a good customer but have one or two late payments on your record, it might be worth the time to contact that creditor and ask them to review your account and remove what is reporting as negative. If you happen to have a balance on that account at the time, it may help your case.

5. Avoid Credit Inquiries

Each time a bank or credit lender looks at your credit report, it leaves a mark. Too many inquiries in a short period of time could indicate a financial problem and that will affect your credit score. If you are hoping to take out a mortgage in the next few months, do not open any new credit cards or other loans.

It is imperative to remember that the most important thing you can do to maintain a high credit score is to pay your bills on time, every month. Nothing will decrease your score faster than missing payments. Increasing your score is possible within just a couple of months. You should see improvements within 60 days by following these steps.

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5 thoughts on “5 Ways to Increase Your Credit Score Quickly”

  1. excellent tip about paying down the debt but keeping a credit card account open. Few people realise that this can really help your credit score, as it demonstrates an ability to pay back debt

  2. We all know of someone who did not built up credit, even though she/he did all the right things, financially-they built up their portfolio and stayed out of debt. But, without loans or credit cards, they had not built up their credit rating—and they were denied the loan. So, paying off credit cards in a timely fashion, but keeping them is wise. You cannot build your credit without using it.

  3. 1) Get a credit card; pay off the balance each month.

    2) Get a non-prepaid cell phone (i.e. monthly bill).

    There. You’ve got a credit score and didn’t need to ever pay usurious interest rates. Mine’s close to 800 and I’ve never even had a mortgage.

  4. Paying off your debt is extremely important I think. Most consumers often make the mistake of closing the accounts though once they’ve been paid off, DONT! Keeping the cards active and current is best, it shows that banks trust you when you have open accounts. So I tend to recommend paying off the accounts, but keeping them open for a quick credit boost.

  5. Remembering not to ever use more than 30% of your allotted credit extension is crucial, as well. Once you dip into the 40% range, you can expect a drop of 10-20 points almost immediately. Paying off your card in full each month is the way to get the quickest and most optimal results. Much like keeping thin and fit, it’s about prevention instead of indulgence and then trying to dig yourself out. If you keep fit for years, you can get to 800+, but if you’ve only had a five years of good history and a couples years preceding it that weren’t so great, you can expect to reach highs of 760 only.

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