Credit Scores are an extremely integral part of anyone’s financial life. Want to start a business and need a loan? You need a good credit score. Want to buy a car? You need a good credit score. Want to rent an apartment? You need a good credit score. You get it — you need a good credit score to ensure things as essential as transportation and shelter. But how do you boost your credit score quickly?
A credit score is a grade based on how well you pay off your credit, loans, etc. More specifically, FICO Scores are calculated using your credit data. According to myFICO, it breakdowns like this: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). But to make things a little more confusing, this breakdown isn’t necessarily the case for everyone. The importance and weight of each category can differ from person to person.
So, it comes down to this. If you pay off everything on time, great your score is probably pretty decent. A lot of that comes down to learning to manage your money. But, if you don’t, things might not be looking too hot in the credit department.
Should you find yourself in the latter position, here are a few ways to boost your credit score quickly. They are listed in order of how much time each method takes to boost your score, from the shortest to the longest.
This method takes minutes, if not seconds. I randomly stumbled upon it because of a YouTube video, and I was curious, and it was free. Within five minutes, my score increased by ten points. Nothing too crazy, but still, it was cool to see.
Don’t expect insane point jumps, but the average user improved their score by 13 points, which is still pretty decent, especially if it moves you from one ranking to the next (e.g., fair to good or good to very good).
It all seems a bit too good to be true, but what the software does is pretty straightforward. With your permission, Boost uses your on-time recurring monthly payments like utility and telecom bills to boost your score. Even though you might not be paying your full credit card bill on time, these payments still show that you are a trustworthy client who can pay their bills, so you will almost instantly see your score improve.
Check Your Credit Report
According to the Federal Trade Commission, about 25% of Americans have errors in their credit reports (e.g., misreported payments, duplicated accounts, etc.), so it’s important to review your report for these issues. If you do find some, dispute them and have them removed. This method is an extremely efficient and quick way to improve your credit score.
Another vital thing to check is to see if your paid off late payments or collection accounts are still on your credit report. If you’ve paid them off, ask to have them removed. This process takes a little more effort, and you may have to track down the collections agency or original creditor to remove it.
Also, pro-tip, try and have the account removed entirely if you can because that will have a more significant impact on your score, but if not settle for having the account show as paid. Take what you can get.
Increase Your Credit Limit
This one is pretty straightforward. The higher your credit limit, the lower your credit utilization rate, so the better your score. Be warned; this only works if you have self-control and don’t max out your new limit.
You can quickly increase your limit by either opening up a new card or asking your bank to raise your limit. If you choose the former option, make sure you select a card wisely (e.g., good CashBack/rewards, low fees, etc.), and do so sparingly. Each time you apply for a card, the issuer pulls your report, which can ding your score a few points.
A good credit score means better credit cards with better rewards, lower interest rates on loans, and simply put more options.
If you’re looking for a to boost your credit score quickly, any of the above will do you good and well, but this is just the start. If you’re looking to make an impact and fall into the Excellent category, you need to start living below your means and paying off your debt in full.
It’ll take some time and practice, but once you get the hang of things, you might find yourself closer to that infamous 850 than you’ve ever been.