Sometimes we need to boost our credit scores to get a better apartment, or to qualify for a better car loan, with lower payments or a higher amount. When we face these decisions, we may not have a lot of time.
If you’re looking to increase your credit score quickly, to meet one of life’s demands, then there are a few things you can do–and a few scams to look out for. Here are the 8 best tips to getting your score boosted and updated. But if you want a hassle-free approach, let someone else do it for you.
Letting Someone Else Fix Your Score
I’ve been keeping my eye on companies that offer credit repair, and I recently researched the field and came away with the Best Credit Repair Companies. If you’re short on time or you’d just prefer a professional take over, then your best option may be a Credit Repair business that specializes in fast results.
If you go this route, be sure to check out my article, as you want to make sure you’re going with someone effective and trustworthy. If you’d prefer to do the credit repair on your own, read on.
Doing it Yourself
Get Credit Score App
Credit score apps are absolutely necessary for monitoring your credit. The most popular, Credit Karma and Experian, are good options, and trusted. Once you have the app, or if you already have one, you need to do a little research on your score to decide which of the next steps to take first.According to TransUnion, one of the “Big Three” Credit Bureaus, scores are only updated every 30 days, and sometimes an item only updates every 45 days. That means you can’t waste your resources.
According to TransUnion, the two biggest things that drag down credit scores:
- Missing Payments
- High credit card usage
Once you have your credit report on a trusted app, look for the function that shows where your missed payments are, if any, and what your credit card usage is. Once you have that information, it’s time to get to work.
Maybe the worst thing you can find on your credit report is an error. Any mistake or fraud can seriously damage your credit, and if you’re not looking, you’ll never find it. If you find errors–accounts you didn’t open, or payments you made that weren’t reported–you can contact those people immediately.
If you can prove you’re correct, and the company with the issue is a quality business, you could see a dispute positively affect your credit in the next reporting cycle. If not, you may have to wait past the 30 days for the next month.
Speed Impact: Immediate to Three Months
Pay Down the Most-Used Credit Card
Any credit usage over 70% is going to hurt your score, and sometimes that’s calculated based on which card is used, or what your total credit usage is.
Here’s an example. Pretend you have two credit cards with $1,000 in credit each. On one you owe $900, and on one you owe $100. Then your credit usage is at 50%. Paying down both cards by $100 gets you down to a total of 40%, but the first card is still at a whopping 80% of its max!
Instead, pay the minimum on the least used card, and pay down the rest of your available cash on the most-used card. If you can get that second card down below 70%, you’ll see a much quicker boost.
Speed Impact: Next Report Cycle
Ask for a Credit Increase
If you’re short on cash, or just don’t have enough to pay down a credit card enough to drop your usage, then you can ask one of your credit card companies to increase your credit limit. This will have an immediate impact on “dropping” your credit usage, as reported to the Bureaus.
It works like this: if your credit card has a total limit of $1,000, and you’ve used $900 of it, your usage is reported as 90%. If you can increase that limit to $2,000, then your usage is reported immediately at 45%, even though you’ve used it just as much.
When you ask for the credit increase, make sure you ask two important questions:
- Will it require a ‘hard inquiry’ on your credit report, and
- will it increase your interest rates.
Most credit increases don’t come with any hard inquiries, so you’ll be safe there. But if they significantly increase your interest rates, you’ll have to weigh that against the benefit of increasing your score.
Speed Impact: Next Cycle
Become an Authorized User
This tactic can work immediately, but it also relies on knowing someone with great credit who’s willing to help you out. First, find someone who has a large credit limit and doesn’t use it. Second, ask them to add you as an account holder or authorized user on one or more of their credit cards.
Becoming an authorized user works like number 3, where you increase the credit limit on your own cards. In this case, though, your total “borrowing power,” or “credit limit” is being boosted by adding the other person’s credit limit to yours.
Speed Impact: Next Cycle
If you’ve sensed a theme–paying down credit cards–you’ve hit on one of the biggest secrets to increasing your score. Credit cards have a huge impact on our scores, and one work-around is securing a personal loan for the same amount as you owe on all your credit cards.
Securing a personal loan can be dicey if your score is too low (for that, look at number 6 on my list). But if you can qualify for a personal loan large enough to pay all or most of your credit card loans, you’ll see the biggest possible boost to your credit score.
I suggest using personal loans quite a bit (check the drop down menu at the top of this page). The three biggest reasons for a personal loan:
People with the highest credit scores make enough money to pay down their credit cards, every month, to below 7%. Most of us can’t do that. But a personal loan can pay off your credit cards, and boost your score, getting you closer to the apartment, car loan, or even home loan you need.
Speed Impact: Immediate
Increase Your Credit Mix
If you don't have access to a personal loan, or you don’t have many credit cards, your score is probably low and you have no real way to increase it fast. That’s why some people are taking to a new option that adds monthly payments you already make to your credit report.
Experian has trademarked this process, calling it Boost (note the capital ‘b’), and it does provide instant results for many people. The process is relatively simple, and it works like this:
You can even request something called a “look back” where they pull your total payment history and they add that into the calculation. This is an excellent option for people with great payment histories (all bills, all on time!), but who don’t have a lot of cash or credit usage.
Speed Impact: Immediate
Request a Rapid Rescore
Let’s say you’ve done everything you can, and you’re right up against the deadline for needing that score boost. If you’ve done everything on this list, and haven’t noticed any movement in your score, you can ask for a rapid rescore.
Because the Bureaus only make their reports every 30 days, it may be the case that your positive work has been reported by the credit card company, but isn’t reflected in your score. Basically, the credit bureaus have the information, they just haven’t made it public, yet.
In this case, you can ask the lender you’re talking to for a rapid rescore. In this case, they send out a message to all the bureaus, basically asking “has this person made progress you just haven’t reported yet?” And if you’ve been ticking all your boxes, you’ll get a new score, then and there, with a much better number.
Be advised, there’s usually a fee for this rescore, and it isn’t magic. If you haven’t increased your limits, or paid down the usage, then your score won’t have changed.
Now Your Scores Up, Keep it Up!
These are the fastest, most effective ways to boost your score. You’ll also notice that the lower your score, the bigger the increase. If you already have a score in the 700s, good for you; you won’t see that big a jump. But if you're in the low 600s, your boost could be huge.
Just remember, keeping these tips in mind can not only boost your score, but keep it up, so keep these steps in mind.