You may be new and trying to build credit in this dynamic economy or you may be struggling with a bad credit score and you are trying to find fast ways to increase your credit; if this is your case, We have good news for you, the worst your score, the fastest you’ll be able to increase it. This is to the fact that small changes can make a lot of difference.
So, even though this is not an article that will teach you how to increase your credit score to 800, here are a few tips that you can follow to increase your credit score faster or build credit from scratch.
We’ve spoken about this before in other articles. The importance of paying on time is way too big when it comes to improving your credit. This is because payment history affects directly your credit score and lenders, banks, and other entities take this into account when you are applying for a new credit card or asking for a loan.
Since late payments are reported to credit bureaus, they will affect your financial possibilities because they will be shown in your credit reports. Each month that you pay after the due date is a stain on your credit score. And even when they fade away with time, the effects stay for 7 years.
So, if you are facing this situation, you need to find ways to overcome this and set payments before the due date.
The first thing you should do is creating a budget where you include all your debts. This way, your monthly income will be able to cover your bills including those acquired from loans and other types of debt.
If you think that you won’t be able to control your finances, then look for assistance so they can set it all up.
This is one of the fastest ways to build credit from 0 that will help you to control your credit score.
A lot of people are used to pay the minimum amount that they see in their bills when it comes to debt, even when they are actually able to pay even more. This will make you enter into an endless cycle of debt since the minimum payment barely covers the interests produced for your loan or credit card.
So, what you can do to pay off your debts sooner is establish a series of micropayments throughout the month. This will help you to keep in check your balances and slowly improve your payment. Now, you may be wondering, “if I have that extra money, why don’t I pay it all at once?”
The reason for this is that lenders and bureaus take micropayments as a good sign of payability and acquisitive power. As a result, it will boost your score.
Actually, after payment history, this is another factor that highly increases your credit score.
Let’s say that you are very good at paying your debts, for example, a credit card, or you have been promoted in your job and you are earning more money, you can request your issuer to expand the credit limit in your cards.
If you can prove to the issuer that you are more trustable and have more money, they will accept your request.
Now, the catch for this to help your credit score is that you need to spend the same amount of money on your credit cards while having more credit limit since it will instantly lower your overall credit utilization.
And just to let you know, if you don’t have any credit cards yet, we recommend you look for the best credit cards to build credit before getting one.
Did you know that sometimes your financial reports can be wrong?
Yes, since the reporting companies like Equifax, Experian or TransUnion have way too much information, they can be wrong sometimes when they create your credit report. In order to see this, you can ask for 1 report every month to these companies. They will send it to you and that’s when you need to check everything.
You need to pay attention to the late payments or unpaid bill details since those are the ones that can hurt your credit. If you see any information that is mistaken, you can report it to the company and they will tell you where to start a dispute.
This is a crucial step, credit reports are having more and more relevance in the life of financially active people, even when it comes to hiring decisions. So if you want to maintain a good credit score you need to check your reports each month.
These tips will help you to understand the little things about increasing your credit score fast and the importance of delayed payments within it.
Credit has a lot of power in our economy. And because of that, people that don’t know how to use it will struggle during their whole life. And that is not the way of living. If we don’t learn how to build credit and how to manage debt, we won’t be able to actually grow and thrive.
Only through personal financial literacy, we will be able to overcome the difficulties of debt without having to appeal to a credit builder loan, even though this may help you a lot.