Arrow showing credit score rising.

4 Fast Ways To Raise Your Credit Score

Your credit score plays a huge role in your life. Without a good score, everything that you do financially is tougher and will cost you more. A bad score can even affect your employment opportunities. Like it or not, you need to play ball with the credit bureaus. If you are one of the 20% of Americans with a bad credit score, here are some of the fastest ways to get your number headed in the right direction.

Fast is a relative term when it comes to credit scores. If you are needing improvement in days, you are pretty much going to be out of luck. The bureaus just do not work that fast in most cases.

Realistically, two months is fast in the credit realm. It will take at least two months for any change to take affect on your score. So, now that you know what fast means, let’s look at fast ways to improve your credit score.

1. Fix Credit Report Errors

This is the first thing that you should do. If you have not checked your credit in some time, you have no idea about what is on there. You will need to pull your credit report from all three bureaus. The three main bureaus are Experian, Trans Union and Equifax. You must do all three because, if you are applying for a loan, you never know which bureau they will use.

You can go to each bureau and request a report. You are allowed one free report each year. You can also use a service like Credit Karma to get a few of your reports but they only give you access to Trans Union and Equifax. If you use Credit Karma, you will need to go to Experian directly to get your report from them.

Do not assume that you can just pull one report and that the rest will be the same. It is very common for only one bureau to have inaccurate information on it.

Once you have all of your reports, examine them for inaccuracies. Make sure that there is no untrue negative information and that all of your accounts have up to date information. If you payed off an auto loan 6 months ago, for example, make sure that it is showing paid off.

If you find an inaccuracy, your report should tell you where to send a dispute. Use a standard dispute letter like this and mail it to the address given.

Once the bureau receives your dispute, they will open an investigation. They then have up to 30 days to either prove that the information is correct or remove it.

2. Lower Your Credit Utilization

A major factor in your score is the amount of your credit that you are using. If you have a $2000 limit card and you have a balance of $1000, you are utilizing 50% of your credit. For the best score, this should be 30% or less.

You do not have to reach that magic number to get a credit score increase, it is incremental. If you have, for example, 80% utilization and lower it to 60%, you will see an increase. Keep dropping the number and you will keep seeing an increase until you reach that magic number.

There are three ways that you can improve your percentage.

First, you can obviously pay down the amount that you owe. Pay as much as you can and consider making payments twice a month instead of once a month. Even if you pay the same amount in a month, split over two payments, you will save on interest. This is because most interest is compounded daily.

Another way to lower your utilization ratio is to get a credit limit increase. If you have a $1000 card charged to $500, you are at 50%. Get your limit increased to $1500 and that percentage drops to 33%. All you have to do is call your credit card companies and ask for an increase. If you have been paying well, they will probably give you an increase and since you have a relationship, they might not even run your credit again. If they do, it will probably be a soft hit.

Finally, if you strike out at increasing your limit or if you just want to take it a step further, you can open a new account. The new account will show the limit and as long as you do not use it, a zero balance. If you increase your available credit without using it, your percentage will go down.

3. Negotiate Collection Accounts

If you have some accounts in bad standing, they have probably done a good bit of damage to your score. You can’t do much about the late payments but you can negotiate the debt.

Contact the creditor and negotiate a payoff amount. Once you pay it, the creditor will report the debt as satisfied which should at least help your score.

4. Sign Up For An Experian Account

Experian offers a free credit monitoring service with a unique benefit that you probably are not aware of. They allow you to use your utility bill history to improve your score.

After you sign up for an account, you will have to give them access to your bank account. When you do, they will search for transactions made to utility companies. They will then use this information to provide you with a boost to your credit score.

The tool is called Experian Boost and you can get a nice little increase by using it.

To Wrap Up

The four tips above can have an affect on your score in just a few months. Depending on what your credit report looks like now, they can even have a fairly large impact, possibly moving you from what is considered a bad credit rating to one that is considered average or better.

There are, of course, other ways to increase a credit score but they all take time. If you have slow pays, for example, you can pay your bills on time and that will help. You can age your credit accounts to show a longer credit history. Got a bankruptcy or other statement on your account, time will lessen its impact. Things like this will improve your score but they take years.

Posted by

James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.