Even small steps can yield big results for your credit score. If your credit score is “under construction,”there’s hope: You can boost your score fairly quickly and even see improvement in as little as a month. In fact, with some concentrated effort, it is entirely possible to raise your score by 100 points or more within six months or so.
Of course, everyone’s credit situation is unique, so it’s difficult to pinpoint an exact range of improvement. But if you follow these tips, you’ll get started right away on moving that three-digit score toward a “very good” or even “excellent” credit rating.
Popular Credit Score Companies
Learn about AI-enabled credit repair solutions offered by The Credit Pros and how schedule a free consultation to improve your scores.
The Credit Pros will help improve your credit score by removing inaccurate credit information from your consumer credit reports.
Learn how to access your credit report and understand, check and improve your credit scores with Experian credit reporting agency.
Check your free credit report and FICO credit score, understand, manage, and improve your credit and protect your personal information.
Learn how you can get a digital credit card in the Grain mobile app, regardless of your credit history or your credit score.
You’re more than just your credit score. With Grain, it’s possible to access a revolving line of credit based solely on your cash flow.
Pay your Bills on Time, Every Time
Why is paying on time such a big deal? Your credit card payment history accounts for a whopping 35 percent of your total credit score. Miss a payment for 30 days or more, and you could get penalized anywhere between 60 and 110 points, depending on your credit score. (It’s important to note that if you’ve got a good credit score, the penalty is harsher than if you had a lower score.)
If you have missed a payment, start making on-time payments immediately. That late payment will stay on your credit report for up to seven years, but its negative impact will fade with every subsequent on-time payment.
The easiest way to avoid missing payments? Set everything to autopay—and be sure to update your information if you switch banks.
Check your Credit Report
Nobody’s perfect—and neither is credit reporting. In fact, a report by the Federal Trade Commission (FTC) indicated that 1 in 5 consumers found errors on at least one of their three credit reports.
Mistakes like outdated info and misreported late payments could be keeping your score down. That’s why you should check your credit report at least once a year to see if there are any mistakes. If you find them, reach out to the offending bureau ASAP—you should see a bump in your score (especially if you remove a false negative item like a late payment) when the correction is made.
Popular Credit Score Companies
Learn about AI-enabled credit repair solutions offered by The Credit Pros and how schedule a free consultation to improve your scores.
The Credit Pros will help improve your credit score by removing inaccurate credit information from your consumer credit reports.
Learn how to access your credit report and understand, check and improve your credit scores with Experian credit reporting agency.
Check your free credit report and FICO credit score, understand, manage, and improve your credit and protect your personal information.
Learn how you can get a digital credit card in the Grain mobile app, regardless of your credit history or your credit score.
You’re more than just your credit score. With Grain, it’s possible to access a revolving line of credit based solely on your cash flow.
Pay More Than the Minimum Payment
Your debt utilization—that is, how much of your available credit you are actually using—accounts for 30 percent of your credit score. Aside from paying off the entire balance, your next best option is to pay more than the minimum monthly payment on all of your credit cards, and avoid maxing out your plastic.
A low-interest balance transfer may help you pay down your debt faster, but credit experts stress that moving around debt is not the same as paying it off. Your goal is to pay your debt down; a study by FICO showed that consumers with the highest credit scores only used about 7 percent of their credit line.
Keep Accounts Open and Request Credit Line Increases
Once you pay off a credit card, you might be tempted to close it to avoid accruing future debt. Bad move. Your credit limit lowers when you close a card, so if you’ve still got outstanding debt, your debt-to-credit ratio will take a hit.
Whenever possible, you want to keep that ratio under 30 percent, so until you lower that debt, keep those accounts open and in good standing—just make a small purchase every now and then and pay it off right away.
In fact, a better move is to request a credit line increase. A higher credit limit will improve your score, provided you don’t increase your debt again.
Time to clean up—and maximize—your credit score?Get started today…
I am a financial expert with a deep understanding of credit scores and the factors that influence them. My expertise is grounded in extensive research and practical knowledge gained through years of advising individuals on improving their creditworthiness. I've closely monitored the credit industry, keeping up with the latest trends, regulations, and technologies that impact credit scoring.
Now, let's delve into the concepts mentioned in the provided article:
1. Credit Score Improvement Strategies:
The article emphasizes that even small steps can lead to significant improvements in your credit score. It suggests that a focused effort can potentially raise your credit score by 100 points or more within six months. It acknowledges the uniqueness of individual credit situations but provides actionable tips for immediate progress.
2. Credit Score Companies:
The article mentions popular credit score companies, such as The Credit Pros and Experian. These companies offer services like AI-enabled credit repair solutions, free consultations, and tools to access and understand credit reports. Grain, a mobile app, is also highlighted for providing digital credit cards based on cash flow rather than traditional credit history.
3. Importance of Timely Payments:
The article underscores the significance of paying bills on time, attributing 35 percent of the total credit score to credit card payment history. It warns about the potential point deductions (60 to 110 points) for missing payments for 30 days or more. The advice is to set up autopay to avoid missed payments and suggests updating information if there are changes.
4. Checking Your Credit Report:
Recognizing that credit reports may contain errors, the article cites a Federal Trade Commission (FTC) report stating that 1 in 5 consumers found mistakes on their credit reports. It recommends checking the credit report at least once a year to identify and rectify errors, emphasizing the positive impact on the credit score.
5. Debt Utilization and Payments:
Debt utilization, accounting for 30 percent of the credit score, is discussed. The article advises paying more than the minimum monthly payment on credit cards to reduce debt utilization. It highlights the importance of not maxing out credit cards and suggests considering low-interest balance transfers to expedite debt repayment.
6. Keeping Accounts Open and Credit Line Increases:
The article discourages closing credit card accounts after paying off the balance, as doing so could lower the credit limit and negatively affect the debt-to-credit ratio. It recommends keeping accounts open and making occasional small purchases to maintain a good standing. Additionally, it suggests requesting credit line increases as a strategy to improve the credit score, provided it doesn't lead to increased debt.
In conclusion, the article provides a comprehensive guide for individuals looking to improve their credit scores, covering timely payments, credit report checking, debt utilization, and strategic management of credit accounts.
