How To Raise Credit Score Fast In 5 Easy Steps
Who doesn’t want a high credit score? With a high credit score, you can get a loan with low interest rate. Additionally, having a good credit score would influence the amount you would pay as down payment for the loan. Broadly speaking, higher your score, lower the interest rate and lower the down payment. No wonder everyone is so concerned about how to raise credit score fast. I have outlines, in this article, 5 simple steps that would guarantee a raise in your score.
1. Go Get a Copy of Your Credit Report
Repairing credit starts with getting your credit report and spotting errors. It is almost certain that there would be errors in your credit report if you have ever used credit. If left uncorrected, these errors will continue to hurt you.
So go get your report from the three credit reporting bureaus – Equifax, Experian and TransUnion. Then if you find any errors, contact the credit reporting agencies immediately to have the errors removed. You have nothing to lose, but everything to gain. Just remember that checking your score will in no way harm you. On the contrary, you may find errors that when corrected would raise credit score fast.
2. Lower Your Credit to Debt Ratio
It is your credit to debt ratio that determines your ability to pay back a loan. If your total debt exceed about 36-40% of your income, it means that you may not be able to fulfill your repayment obligations. That is why lenders are really interested in your credit to debt ratio.
A high credit to debt ratio also hurts your credit score. One way to raise credit score fast is to lower your debt ratio. Taking this step can raise your credit score by as much as 50 points in a matter of 30 days or less.
3. Pay Your Bills on Time
Some people fail to pay bills on time because of their forgetfulness. So don’t allow forgetfulness to sink your score. Take note of important dates when your monthly payments are due but make it a goal to pay a day or two earlier. Failing to pay on time would make your creditors to report the missed payment to the credit reporting agencies.
4. Dispute Every Wrong Information
If you are to raise credit score fast, you must learn to spot errors on your credit report. At times, your credit report may show that you have an outstanding balance on a loan that you have paid off completely. When this happens, contact the credit reporting bureau immediately to correct this problem. With the error corrected, your credit score could gain as much as 20 to 70 points.
In addition, make sure to look out for late payments and charge-offs that don’t belong to you. And dispute the entries without delay.
5. Do Not Go Frenzy With Loan Shopping
Even though it is recommended that you shop for loans so that you can compare, this should not get out of control. This is because each loan application you make can affect your credit score negatively. Conduct a search wisely. Do not go berserk with shopping for loan.
With the many benefits that come with having a good score, everyone should be interested in knowing how to raise credit score fast. But like every good thing, raising credit score fast requires discipline and diligence.
But what if I told you that you can fix your credit yourself in as little as 37 days? Read my 37 Days To Clean Credit ebook review to find out how.
Tags: credit report, credit score, debt ratio, Equifax, experian, good credit score, loan, raise credit score, raise score, score, transunion
How Bankruptcy May Improve Your Credit Score
Filing for bankruptcy protection is not an easy decision to make. There are many concerns that come to mind when thinking about how bankruptcy will affect your life, and chief among them is the worry that your credit rating will be so damaged, you won’t be able to secure any type of credit, even at terrible rates, ever again.
But here’s some interesting information – in many cases, the damage to your credit score is not nearly as dire as expected. Over time, you can vastly improve your cedit score after a bankruptcy, possibly making you eligible for more loans in the future.
One reason your score would not be seriously affected is that, if you are in such dire circumstances to even consider filing for bankruptcy, then chances are you don’t have a stellar score to begin with.
After filing, some consumers may even see a slight bump up in their credit scores. And this is due to credit report being largely wiped clean after a bankruptcy. Your high balances are removed as well as any late payments or records of unpaid debts. All the accounts included in your bankruptcy will be noted as “Included in Chapter 7 Bankruptcy” or “Included in Chapter 13 Wage Earner Plan,” depending on which type of bankruptcy you filed.
Of course, you aren’t likely to see a big boost, however, if you’ve just been getting by or not paying bills at all, your credit isn’t likely to fall much further.
But a bankruptcy could help improve your score over the long term. The reason? When calculating scores, the FICO formula used to calculate credit scores are set up to grade the consumer’s credit standing as compared with that of other consumers in a similar financial situation. To do that, divides consumers into 10 groups, using what it calls “score cards.” It then ranks the consumers in each group based on the others in the group. One of these score cards is bankruptcy filers. (For competitive reasons, Fair Isaac doesn’t release what constitutes all 10 groups.)
In other words, when you file bankruptcy your score is determined based on how you do compared with other bankruptcy filers,
As a result, credit scores can run the gamut among bankruptcy filers. “In that population, you’ll find some consumers who have very good FICO scores, some who have very bad FICO scores, and in between,” Watts says. (Fair Isaac doesn’t have statistics on the average FICO score for bankruptcy filers.) Granted, you won’t be able to bring your score up to the perfect 850 as long as your bankruptcy stays in your report, but with good credit management after filing, a score in the 700s isn’t impossible.
Then again, your credit score alone shouldn’t affect whether or not you decide to file bankruptcy. Most experts would still say that if you can dig your way out of debt without declaring bankruptcy, that’s a better way to go, since, among other things, you may be forced to sell certain assets — in some states even your home or car — to meet the bankruptcy filing requirements. (This can be the case with Chapter 7 bankruptcy, but not Chapter 13.) Another issue: Given the tougher new bankruptcy rules, you may not even be able to declare bankruptcy.
That said, if your debt payments are crushing you, bankruptcy will give you a much-needed fresh start. And with a few clever credit repair strategies, your score could be back in the 700s within two or three years.
