A good credit score cannot be built in a single day. Building your credit score won’t be easy as cooking instant noodles, where you can do little work and instantly get the result.
To build a good credit score it requires a lot of work. It takes time, so no quick fix for it. Seeing any improvement in credit score could take 60-90 days depending on your past behavior.
Is your credit score below 760? You want to achieve this magic number?? There are things you need to work on it now, to improve your credit score in next 3 months.
Few important steps you need to take right now.
Check Your Credit Reports Regularly–
You need to check your credit report regularly and fix the errors there to improve your credit score. In case you haven’t done that, you can request a free copy of your credit report and check it to find any errors present.
Do you know? 5% percent of consumers had an error on their three credit reports.
Sometimes your credit report may contain errors which might affect your credit score as it contains the data used to calculate your credit score. One tip is to make sure that there are no late payments which are incorrectly listed for any of your accounts and that the amounts owed for each account are correct.
Setup Payment Reminders –
You always need to make your credit payments on time as it is one of the biggest contributing factors to your credit scores. Few banks are there who offer payment reminders through their online banking portals which help you to remember when your payments are due. You can also enrol to pay automatic payments through your credit card and can enable loan providers to have payments automatically debited from your bank account.
Reduce Your Debt Amount–
This might be the most difficult of all the tasks but reducing the amount that you owe is going to most important tool to improve your credit score. Initially, you need to do is stop using your credit cards. You can use your credit report to make a list of all your accounts and then determine how much you owe on each of your accounts and identify what interest rates they are charging. You need to initiate a payment plan that gives more importance to paying debts of the highest interest cards first while at the same time maintain minimum payments on your other accounts.
In addition to making these right moves, you also have to make sure that you are consistent on your plans. Mentioned below are few easy techniques which can improve your score –
Negotiate with your creditors –
You can consult your creditors to delete any kind of debts which are pending. Notify them that you will be paying the remaining balance if and only the creditor will mark all your debt as paid or maybe even totally remove it.
Become an authorized user –
You can always opt for one or two pieces of plastic, it will do good things to your credit score. This will happen only if you don’t charge too much and pay your bills on time. In other words, you definitely have to be a responsible user of credit.
You can declare to put an agreement in writing. In the agreement, you can state how much you can spend and how you will pay your share of the bill to the cardholder. Then the most important part is to do honour your agreement and use the card responsibly.
Under-use your cards –
You need to be responsible use your card and make sure that the “credit utilization ratio” is not more than 30% and ideally even less. This will help you become financially rich.
Raise your credit limit –
You can always your creditors to increase your limit. You can make your Mastercard good for up to $3,000. But you need to be cautious in this case as it works only if you can trust yourself not to increase your spending habits.
Bad credit scores have no easy fixes. The fact is that you don’t rebuild the credit score, in fact, you rebuild your credit history, which then reflects your credit score. The time taken to rebuild your credit history depends mainly on the reasons behind the change. The negative changes in credit scores occur mainly due to the addition of a negative element to your credit report which might include things such as a delinquency or collection account. Except for bankruptcies and unpaid tax liens, most public record items remain on your credit report for seven years. Whereas inquiries remain only for two years on your report.