If you are among those concerned about the status of your credit score, the following strategies are incredibly simple and will help you understand how to build your credit score fast.
There are few things more frustrating (or stressful) than the sudden discovery that your credit score might prevent you from purchasing a home or securing a small business loan.
Unfortunately, most consumers are blissfully unaware of the current state of their credit score.
And even less people are likely to understand how to quickly rebuild their credit score when needed.
How to Build Your Credit Score Fast: 5 Simple Steps
Step 1: Ensure Your Credit Report Is Accurate:
The overwhelming majority of consumers are surprised when they learn just how common it is for errors and inaccuracies to adversely influence an individual’s credit score and credit report.
This is part of the reason why every consumer is entitled to a copy of their credit report once per year.
You can get one free credit report each from the three major credit bureaus.
You should take full advantage of this opportunity and take it one step further by signing up for a 24/7 credit monitoring service such as the one offered by ID Shield.
This will ensure you are kept up-to-date regarding any changes to your report so that you can immediately address any issues that may be harming your credit score.
Step 2: Keep Your Credit Utilization Ratio Low:
Your credit score is partially determined by what’s called your credit utilization ratio.
This is a simple measure that is based on the amount of credit currently available to you versus the amount of credit you have already used.
Your credit score tends to be adversely affected once you have used up about 30 percent of your available credit.
Most experts agree that you should work diligently to avoid exceeding 10 percent of your available credit at any given time if at all possible.
This will help your credit score and will also ensure that your outstanding debt remains manageable.
Step 3: Pay Down Balances As Fast As Possible:
It’s easy to get into the routine of paying the minimum balance on revolving debt like a credit card, but this will do little to improve your credit score.
Instead, get to the place where you’ve got all your credit cards paid for. Only keep 2 credit cards open. Use both on a regular basis and at the end of the month, pay them off in full.
This will reflect a good credit history and will boost your scores in no time. As a matter of fact, if you improve your score to the point that your able to get a rewards card, you can make money from the credit card instead of the other way around.
Read this post on How I make over $1,000/year off of my credit card.
Step 4: Stay Current On All Your Bills:
Since your credit history is one of the key components in determining your credit score, paying your bills on time is critically important.
Start rebuilding your history by paying down all of your bills on time.
While there are many strategies for quickly building your credit score, one of the surest methods for improving your credit score is to stay current on your monthly bills.
This sounds simple enough, but it makes a huge difference in the credit risk you are to a lender or insurance company and keeps your scores up nice and high.
Step 5: Settle Past Delinquent Charges:
Get a copy of your credit report and if you have any past delinquent charges out outstanding debt, settle it.
This doesn’t have to be an anxiety provoking situation. Simple call the accounts, if they are being managed by a collection agency, call them.
Then negotiate for a lower payoff to settle the debt. You’ll find that many times you can decrease that outstanding debt for pennies on the dollar.
For example: Say you owe $5,000 on some delinquent credit charge, call them up and let them know you’d like to settle the debt but can only afford to pay $200 dollars.
When they agree, get everything in writing so that you can report this new info to the credit card agencies.
This alone with improve your credit score immensely.
How to Build Your Credit Score Fast: Conclusion
We’ve outlined 5 simple techniques to teach you how to build your credit score fast. The next step is to implement them into your daily routine.
Realize that compounding debt like credit cards are disastrous. Work first to kill this debt and think in those terms. Kill the debt!, Kill the debt! 🙂
Once you get to that point, you just have to live within your current means. Pay off your credit cards each and every month.
The only real good debt to have is mortgage debt due to the tax write offs, but to get to the point of having a home or nice car, you have to have good credit scores. Of course, this takes extra money to do all of this and that all depends on your job, income, bills, and so forth.
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Thanks for reading our fast credit repair post. If you’ve got any suggestions for how to build your credit score fast, we’re all ears, leave us a comment below.
Damian Mosley says
Really great post on how credit works and how to improve your credit score.
A lot of people don’t know this information so I appreciate you getting it out there.
In the space of two months, my credit score went from 600 to 720. I was able to buy my new home and also get a lot off my medical bills paid. I hired a credit repair expert. They have helped over 500 people to secure excellent credit score. So trust me, it can be done.