Building a good credit score can take years. However, sometimes you need to boost your credit score quickly. You may need to find a new apartment or car. Perhaps you need your credit score just a little higher to qualify for a better mortgage interest rate on a home you want to buy. There are five steps you can take to boost your credit score fast.
- Order Your Credit Reports
Order your credit reports from the three credit bureaus, which are TransUnion, Equifax, and Experian. You can get free copies of your credit reports through AnnualCreditReport.com. This website is the only one of its kind that is authorized by federal law. While ordinarily, you can only get one free credit report a year from each credit bureau, you can get free weekly online credit reports during the pandemic.
Carefully look through your credit reports for mistakes. This can include erroneous overdue debts and missing credit accounts. If you see any errors, dispute them with the credit bureau. They are required to investigate any mistakes you dispute in a timely manner. The credit bureaus will usually provide you with a response within 30 days. They’ll give you a copy of the results and a free updated copy of your credit report.
- Pay Down Debt
The best way to build credit fast is to practice financial responsibility while simultaneously paying off debt. Your credit utilization is a major factor in calculating your credit score. How much you owe on your credit cards compared to the amount of available credit makes up approximately 30% of your credit score.
You should always keep your credit utilization below 30%, or even more ideally, less than 10%. One trick is to make a payment before your credit card statement is generated if you make a large purchase. By doing this, it won’t show up when your statement is generated, and the balance is reported to the credit card bureaus.
- Increase Your Lines of Credit
You can reduce your credit utilization by asking to have the limits increased on your credit cards. This will quickly increase your credit score as it reduces your credit utilization. How much credit you have available is also a factor in determining your credit score, with more credit being available looked at favorably.
You shouldn’t get a new credit card to boost your credit score. While this will make more credit available to you, your credit score will go down temporarily, as asking for a new credit card triggers a credit inquiry. If you want to boost your credit score fast, opening a new credit card will be detrimental.
- Catch Up on Past Due Accounts
If you have any accounts that are past due, catching up on them can help boost your credit score quickly. Late payments stay on your credit reports for seven years. However, if all of your accounts are current, it can boost your credit scores. By catching them up, you will also prevent new late payments from being added to your credit reports and dragging your credit score down.
- Don’t Close Old Credit Cards
How long you’ve had credit plays a huge role in your credit score. Some people believe that closing an old card will improve their credit score, especially if it has an adverse payment history. This won’t improve your credit score, and closing an old credit card will probably negatively impact your credit score.
If you have an old credit card that you don’t need anymore, just put it in a drawer. You should use it once every few months to keep it active, though, as otherwise, the credit card company may close the account for inactivity. Just be sure to pay the statement when it arrives. Since credit history makes up 15% of your credit score, you want to have as long a history of using credit as possible.