3 Tips to Improve Your Credit Score Fast
We tend to overcomplicate things sometimes that can actually be very simple. Simple, does not mean easy and we get that. It’s not easy to admit you have made credit mistakes in the past, we all have. It’s not easy to admit you are not sure how to fix them. It’s not easy to reach out for help, especially when we are feeling ashamed. We hear you and we have got you!
How can you improve your credit score?
We know that credit is an important factor to help you obtain the life you hope for. It is also financially important that you qualify for best terms and rates to make sure you are not paying more than you need to for those larger purchases like a house or a vehicle. But how do you improve that credit score fast? Here are our top three tips:
- Use credit cards to build credit. Not all the things we make payments on, show up on your credit report and build your credit score. Cell phone bills, utility bills and rent are just a few examples. They will negatively impact your credit if you do not pay them on time, however, they do not help you build and maintain a good credit score. Loans do report and they do help your score; however, credit cards make the biggest impact.
- Pay off your credit card in full each month. To maximize the positive impact of credit cards, put a small, monthly bill on your credit and set up an automatic payment to the credit card. For example, you can put your Netflix charge of $16.99 on your credit card and set up an automated payment from your checking account to your credit card for $17 every month, before the due date. This keeps your balance paid in full and shows that you are using your credit card regularly. Paying off your credit card in full each month will jump your score and maintain a good credit rating!
- Finally, never carry a balance on your credit of more than 50% of your limit. For example, if your credit limit is $1,000 you want to be sure all through the month that your limit never exceeds $500. Keep in mind, your credit score is a snapshot on a given day in the month, so it’s important to always keep your balance below 50% of the limit.
If you do nothing else but execute these three tips, you will see improvement in your credit score and your overall credit report. Ultimately, the goal is to qualify for best rates and terms when we seek credit to buy a home or car. Consistently using a credit card, paying off the balance in full each month automatically and keeping your balance below 50% of the limit at all times will set you up to successfully qualify for best rates and terms when you need to borrow money in the future. If you have low credit score or having difficulty qualifying for the best rates and terms now, taking action on these three tips will increase your credit rating and set up for best rates and terms in the future.
Nothing is permanent, not even your credit score. You can change and improve your credit score and rebuild.