Best ways to improve credit score quickly. Your credit score is so important, it will follow you around for most of your life and can be the difference between owning a home or not. A good credit score and a bad credit score might mean two people end up paying significantly different sums for their home loan despite having the same initial amount loaned. There are ways you can quickly improve your credit score and help yourself attain more favorable loans and make significant savings. This article will cover seven such tips.
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Ways to Improve Credit Score Quickly
Get a Credit Card:
The first tip is that you need a credit card. If you donât have one you are already falling behind, the credit card is a marvelous invention, of course, but it is also the leading factor in defining your credit, as you will find out in the next section. Getting a credit card and ensuring you always pay it off in time is the easiest method to improve your credit score consistently.
Improving Credit Scores Fast
Credit Utilization:
Credit utilization is far more straightforward than it sounds, yet it is one of the driving factors of your credit score. Essentially, it means how much of your credit limit you spend each month. The optimal credit utilization is about 10%, but anywhere up to 40% is also acceptable. In essence, this means to balance your costs on each card across all of your cards percentage-wise rather than value-wise. For example, a card with a 10k limit should aim to spend 1k. A card with a 5k limit should intend to pay 500.
Strategic Debt Payments:
Strategic debt payments are not only could for you but also for your credit score. This means try to balance out your debt payments from your cards so that you stick to that optimal credit utilization. Ensure that you pay down the costs and outstanding debts of each of the cards to ensure that there is a good balance across them all, and NONE of your cards exceed 50% of the credit limit.
Bi-monthly payments:
This one is not always a realistic option for everyone, as not everyone can afford it. The general idea is that you pay off all of the cards every two weeks instead of 4. This shows the credit companies that you are a reliable loanee. The issue is many people simply canât afford to pay off their card until they get paid at the end of the month. Do not make the mistake of paying off your card earlier than you can afford/need to because you may end up being unable to pay off other major bills, which will have the opposite effect you were going for.
Increase Credit Limits:
Your credit limit is a pretty significant factor when we consider our credit score. This is going back to the whole idea of credit utilization. Essentially, if you can increase your credit limit, your credit utilization will decrease by default. You were assuming that your expenses donât increase proportionally. Donât make the mistake of thinking increased limits means you should increase your spending. You should still live within your means.
Loans are Good:
The loans are great! The more loans you have and pay off, the better your credit score will be. The trick is taking out easy to pay loans and then paying them off quickly. For example, a loan for a car is excellent; you can get a nice car and pay it off comfortably, all while increasing your credit score. Donât take out huge loans that you have no hope of paying because youâll ruin your credit into the ground.
Prove where you live:
This one is straightforward, yet many people end up neglecting it altogether. Proving where you live is an excellent way of almost instantly jumping your credit score up. The idea is that you are offering far more accountability. The best way to prove where you live is to register on the electoral roll for where you are currently living. Or, where you spend the majority of your time. Be that at your parent’s house or college etc. This is genuinely the easiest way to improve your credit because you arenât doing anything. Itâs a good idea to be registered with the electoral roll anyway – the improved credit score is just a small bonus!
