Your credit will have a major impact on numerous aspects of your life, so it is therefore crucial that you learn how to maintain it. There are lots of different ways that you can boost your credit score in a very noticeable way over a short period of time. The better your score is, the easier it will be to borrow money without having to pay lots of interest. This article will serve as a guide for getting your credit exactly where you want in no time at all.
How a Credit Score is Calculated
First you will want to learn about how credit scores are actually calculated. You have to keep in mind that no person has just one score. There are three different scores for each of the three major credit bureaus. Your score will ultimately be determined by the scoring model that is used, and there are a few of them. The FICO score can fall anywhere from 300 to 850. There are numerous factors that can affect your score, including late payments, loan defaults, and your credit utilization ratio.
Take Out a Payday Loan (And Pay it Back)
Simply taking out a loan and paying it back on time can also really help you out with improving your credit in a noticeable way. Make sure that you can afford to pay it back by the due date before you even apply though. Failing to pay back a loan on time can majorly damage your credit. Payday loans are particularly good for improving one’s credit because they can be paid back quickly.
These loans usually come with a term of around 2 or 3 weeks, so you won’t have to worry about paying loads of interest. Almost anyone can get approved for a payday loan, which is why it has become such a popular solution for borrowers.
Pay Your Bills by the Due Date
One of the simplest yet most effective ways to improve your credit is to consistently pay your bills on time. While this might seem like a pretty simplistic strategy, it does work well. Those who are always late on their payments can expect to see their credit score suffer as a result. Keep track of when all of your bills are due, and set up automatic payment whenever possible. This way you won’t have to worry about being late on your payments in the first place.
Check for Mistakes on Your Credit Report
It is a good idea to regularly check for mistakes on your credit report so you can get them removed as soon as possible. These mistakes can end up being very costly, so you need to get them taken care of right away. If you see anything on your report that should be there, just contact the proper credit bureau. It could take a while for it to be removed, so you want to get the process started immediately.
Pay Off Your Existing Debt
Another effective method of improving your credit score is by paying off the money you currently owe. This should definitely make a positive difference with your credit in a relatively short period of time. It all depends on how much you owe and how quickly you are able to pay it off. You don’t want to simply ignore your debt, because it isn’t going to simply go away.
Avoid Submitting too Many Credit Applications
Whether you want to get a loan or a new credit card, you should refrain from submitting a lot of applications in a short space of time. This can actually lower your credit score and prevent you from improving it quickly.
Avoid Closing Unused Credit Accounts
It might seem like closing an account of a credit card you don’t use is the logical thing to do, but it can actually hurt your credit. You should avoid doing this, provided you aren’t obligated to pay an annual fee. This is something that can show up as a negative mark on your credit report, which can work against you when applying for a loan. It is especially important to avoid doing this when you are trying to obtain a new line of credit.
The more time and effort you invest into boosting your credit score, the easier it will be to make progress quickly. This could take a little bit of time, depending on just how bad your credit is. When you keep all of these things in mind, you should be able to make a real difference without having to wait a long time. As your credit improves, you will notice that it is much easier to obtain better deals on loans, credit cards and much more. It will even be easier to get certain jobs.