If your credit score is lower than you'd like, there may be quick ways to improve it. Depending on what's holding you down, you may be able to score up to 100 points relatively quickly. Rod Griffin, senior director of public education and promotion at the credit agency Experian, says yes. Paying bills on time and using less than your available credit limit on cards can increase your credit in as little as 30 days.
Paying bills on time and paying your credit card balances are the most powerful steps you can take to increase your credit. Every month that an account is marked as delinquent hurts your score. The two main rating agencies are FICO and VantageScore, and each rating system operates with a range of 300 to 850, with 850 being the best credit score. Each rating agency uses the same basic factors to calculate its score, although they weigh the factors differently in their calculations.
Regardless of the rating model, the most influential factor in your score is your payment history, which represents more than a third (35%) of your FICO score and is considered “extremely influential” for your VantageScore. Because of this factor, late payments and delinquent accounts can lower your credit rating by dozens of points. Almost as important as how you pay your debts is how much debt you already have and how much you could have. In fact, the percentage of your current debt that is already being used and the total debt you already have represent 30% of your FICO score (together) and are considered “highly influential” and “moderately influential” for your VantageScore (respectively).
Keep your balances low and only take out the debt you need to do well here. The age of your credit accounts is also “very influential” for your VantageScore and represents 15% of your FICO score. Keeping old credit accounts open, as long as they are up to date, and taking care when opening new credit accounts will ensure that this factor does not harm your credit rating. Tickiness in considering applications for new credit accounts will also help your new credit factor (10% of FICO).
Finally, rating agencies analyze your credit combination, which is equivalent to 10% of your FICO score, and take it into account when calculating your credit age in VantageScore calculations. Maintaining a variety of types of credit, including revolving and installment lines of credit, can help you with this factor. Credit repair can eliminate errors, fraudulent information, and unsubstantiated accounts, but that's about it. Credit repair won't eliminate legitimate negative brands and accounts, such as justified debts and authorized credit inquiries, only time can.
Difficult queries will be removed from your report within two years, while other negative accounts can last seven to 10 years. In fact, the sooner you contact your creditors, the better your chances of negotiating a lower interest rate or payment plan. Specifically, you'll do better if you contact your creditors before you stop making a payment, or at least as soon as possible afterwards. Creditors don't usually report late or late payments until they're more than 30 days late, so you may have some leeway to reach a settlement.
Because your credit utilization rate is based on both your current balances and your total available credit, you don't need to pay your balances to improve your rate. Instead (or in addition), you can request credit limit increases from your creditors. If you have more available credit, your current debt will equal a lower percentage of that available credit, which will improve your utilization rate. One of the reasons why many consumers end up overwhelmed by credit card debts is the additional costs derived from interest fees, which can exceed 30% when it comes to some high-risk cards, or a penalty (APR) due to lack of payments.
This is further compounded when consumers can only pay their minimum payment, which goes first to interest charges before paying their balance. Here are 10 strategies on how to fix credit repair quickly: Build Your Credit File; Limit How Often You Request New Accounts; Call The Creditor Right Away; Pay As Soon As Possible; Pay Bills On Time; Use Less Of Available Credit; Keep Old Credit Accounts Open; Take Care When Opening New Credit Accounts; Request Credit Limit Increases; Get A Secured Credit Card And Use It Responsibly.