The American economy is built on one word: credit. This means that if you are going to enjoy everything that life has to offer when it comes to buying a home, vehicle, being approved for personal loans and more, you have to take your credit scores very seriously. For some of us, we may want to take out a new mortgage; some others may just want to get the latest iPhone. Whichever group you fall into, know someone is going to run your credit report. The great news for you today is that by the end of this article, you’ll discover the quickest way to increase your credit score.
But first, we’ll briefly discuss a few credit basics. You’ll see how all of it fits together and discover the quickest way to increase your credit score.
Why You Need a Good Credit Score
Some may think it is okay to just “get by” when it comes to a credit score. You know, somewhere around 650 where you are not exactly doing too bad but you are not doing that great either. At that level, you may convince some banks to give you a loan, but the rates are going to be a little higher than normal. Listed below are a few reasons why your credit score is so important.
- Your Credit determines where you live: Many property owners determine who to rent their houses to by running their credit scores. If you have a bad credit score, it will be more difficult to not just buy a house but rent one as well. Most mortgage lenders want to know that you won’t default on your payments before they will consider giving you loans. Your score will also determine how much interest you have to pay on your mortgage. I know you may be thinking, “Well I’m not looking to buy a house anytime soon.” However, bad credit can hinder your chances of renting a good apartment as well.
- Good Credit gives you more negotiating power: If you have a good credit score, you are better positioned to negotiate for lower interest rates. On the other hand, if your score is low, lenders will be less likely to negotiate lower rates.
- Good credit gets you higher limits: While good credit is not all you need to get approval for higher credit limits, it plays a large part. Your credit score is proof that you have a habit of paying your debts on time. This will give banks and lending houses comfort over your likelihood of paying back.
- Good credit means you may not have to pay security deposits on utilities: Establishing a new utility service may be a chore especially when you have to pay those outrageous security deposits. However, if you have good credit, you most likely will not have to pay a security deposit when you want to register for a new service or transfer your service to a new location.
Quickest Ways to Increase Your Credit Score.
Now that you have all the info on why you need good credit, you may be thinking, “But my credit score is already messed up, how can I fix it?” Well, you are in luck because that is exactly what we are going to be discussing in this post.
One thing to know before we get right into it is that bad credit does not go away overnight. It is not built with one late payment and it cannot be fixed by making one timely payment. However, there are a few things you could do to bring your credit score up.
- Clear out your credit: To increase your credit score, you need to find out everything that’s making it low in the first place. So first things first: request a credit report from any of the big nationwide credit reporting companies. When you receive it, you can choose to print it out or have it saved on your computer so you can have easy access to it. Now get to work: Search for any payment default or late bills. If there are any discrepancies, you can raise a dispute with your billers. By clearing out all defaults, you’re already on your way to a better score.
- Pay your balance and reduce your utilization rate: If you have any outstanding payments on any of your credit lines, you can lower them to help your utilization rate. Thirty percent of your credit score is determined by how much you currently owe. Paying off your balances should help your credit score. In addition to that, you need to work on reducing your overall balance. If you have a credit limit of $6000, try not to max it out every month. If you are going to keep a higher credit score, you need to keep your utilization below 30%. That means, if you have a limit of $6,000 on your credit line, try not to charge more than $2,000 to it.
- Become an authorized user: This by far is the quickest way to increase your credit score. If you don’t already know, an authorized user is someone who has been added as an authorized user to another person’s account (usually someone with great credit). Once you are added to the account, you adopt the credit history of the account owner. Now if that history is a great one, it will dramatically improve your own credit rating. Here’s why: your credit report will show all the accounts on which you’re authorized. Being added to a tradeline with excellent credit history is a great place to start raising your credit. While it is more common to reach out to friends and family members to add you to their accounts, if you don’t have that option, you can always purchase a tradeline. By purchasing tradelines, you can in some cases boost your credit score by 100 plus points in no time.
So if you’re thinking your credit is too bad to fix it quickly, think again. There is an answer. All you might have to do is purchase a tradeline. Sign up for a free consultation to see if your credit can benefit from a tradeline.