How to Improve Your Credit Score

In the current financial climate, it is critically important to take steps to improve your credit score. Although there are credit cards for poor credit available, a better credit rating will improve affordability. Credit history repair isn’t an overnight process, but even a discharged bankrupt could qualify for a mortgage in 2 to 3 years. Minor credit problems, such as a payment outside of the grace period, can be recovered from in about 6 months. Should a credit report contain erroneous data, it may be possible to fix credit problems within just 2 to 3 months.

Ways to Quickly Improve Your Credit Score

People with minor credit transgressions will be able to achieve a higher credit score relatively quickly. This can be achieved by doing one or more of the following:

Never max-out a credit card as this will lead to your score falling by 20 to 30 points. Liz Pulliam-Weston of MSN Money recently said that: “You typically can increase your scores by limiting your charges to 30% or less of a card’s limit.” Using less than 10% could achieve far better results.

Avoid cancelling old credit cards as it affects credit utilization. This means that credit reference agencies will believe that someone is more financially stretched as they are using a higher percentage of their total credit allocation. Rather than cancelling the card, fix credit problems by using the card occasionally. Always remember to settle the balance in full and on-time at the end of the month.

Use personal savings to reduce debt.

Request a free credit report from Experian, Equifax and TransUnion and fix credit report errors. For example, a debt that was included when filing chapter 7 bankruptcy that continues to show as active or credit agreements that were never taken out by that person.

Improve Your Credit Score By paying punctually

Personal credit ratings aren’t set in stone as this would provide no incentive to perform credit history repair. If there was no incentive to pay off debt on-time, the system would break down. Although raising FICO scores can be achieved by complying with the terms and conditions of credit agreements, this doesn’t happen quickly. However, each timely repayment will result in a small credit score improvement. Provided that all debts are repaid punctually in the future, that person will be rewarded with a better credit rating.

Rebuild Bad Credit with a Credit Card for Poor Credit

Not everyone has active credit agreements, especially when they’ve filed for bankruptcy. In order to fix credit problems, it is necessary to make repayments on a source of both revolving and instalment debt. The majority of filers will reaffirm instalment debts, such as car and home mortgages. However, most people will write-off credit card debt with a debt free solution. Signing-up to the best secured or guaranteed unsecured credit card is an essential way to improve your credit score more quickly. The sooner the credit repair process begins, the quicker credit approval will take place.

Sources

Pulliam-Weston, Liz. (March 18, 2010). “7 fast fixes for your credit.” MSN Money.