How can you quickly improve your credit rating?

Question

How can you quickly improve your credit rating?

Answer 1

1) make sure any outstanding debts are paid off. If you're ignoring bad debts and hoping they'll go away, you've probably been reported to the credit agency and this will hurt your credit in a big way. Be responsible, don't put your head in the sand and deal with the debts, even if it's arranging new payment terms.

2) pay your bills on time. That's ALL your bills - credit cards, electricity, rent, phone bills etc. It might take six months or even less, but this will have a big impact on your credit rating. Don't allow any reminder letters to come through the door!

3) Set up online banking to pay off your credit cards. If you can't do this, at least pay the minimum off each month and on time.

4) Check your credit rating and make sure it's accurate. If there are any mistakes, apply to have them removed.

5) I've heard having too many credit cards can hurt you if you apply for credit. They don't want to know you've got $7,000 in possible credit that you can rack up over night on existing credit cards. Get rid of extra credit cards, just keep one or two. Consolidate any credit you have to get a better rate to pay it off faster.

6) if you're in dispute with a company, try and iron out any problems without withholding payment. That may seem unfair to you, but if you don't pay your mobile phone bill because they've overcharged you, even if they agree it's not your fault later on, you would have already had a black mark against your name for not paying the bill on time.

Pay the bill on time, dispute the amount and get a refund later on.

Good credit means you're capable of borrowing money responsibility. Companies want to know you can have credit like a credit card and use it responsibility and pay it back.

For example, they like seeing you have a $1,000 credit card, a little bit charged to it each month and then paid off full at the end of the month.

Remember, why would a bank lend you big money for a mortgage if they see you can't handle your smaller debts?

Answer 2

What you have to understand is what makes up your credit score:

1. Payment history- 35%

2. Total debt owed to avialable credit ratio-30%

3. Length of time establishing credit-15%

4. Types of credit established-10%

5. Inquiries and New accounts-10%

With that in mind, this is some steps that you should do in order to get yourself in a better financial position to rebuild your score:

1. Open a checking and savings account if you haven't already- while this won't directly affect your credit score, it does many things. It re-establishes a relationship between you and a financial institution, which by being an customer in good standing, could help make it easier to get approved for credit cards and loans. Most importantly, by opening a checking account

it gives you the single most powerful tool in building credit, to help pay your bills on time, especially if the bank offers online billpay.

2. Gather ALL your credit reports- It's important to know exactly what's on your reports. A lot of times, people believe that their credit is so bad, that they don't bother to check their reports for mistakes, and trust me, mistakes DO happen. The credit bureaus don't get paid to be accurate, they get paid to report. It's important that you gather reports from all 3 agencies to determine not just who and how much you owe, but to make sure that what's on there is even correct. If you do happen to find something that you're sure is not right, you should dispute with all 3 agencies, they all have an online dispute feature in which you can dispute the item. Once you've made sure that there's no inaccuracies on your report, then you should arrange your debts from most recent and lowest amount to oldest and highest amount. Debts that are newer than 2 years are hurting your score the worst and should be handled first. What you should know that just paying off debts, especially collection debts will not help your score. A "pay to delete" or "deletion payment", which is a payment in exchange for removing it from your report completely. I posted several links that explains this more in detail.

http://www.creditinfocenter.com/debt/set...

http://www.creditinfocenter.com/debt/neg...

http://www.creditinfocenter.com/debt/Can...

http://www.creditinfocenter.com/debt/Act...

http://www.creditinfocenter.com/debt/deb...

If you're sucuessful, this will help your score.

3. Open new credit- I had mentioned in #1, about opening a checking and savings account with a bank or credit union, I'm going to tie that in with what I'm about to say. Some major banks (Bank of America, Wells Fargo, USBank, Orchard Bank) and some credit unions offer secured credit cards, which are credit cards that require a deposit to establish credit. Whatever you deposit would be the credit line, for example, if you deposited $300, then your credit line would be $300. The deposit isn't used to pay for what's purchased on the card, you would still need to either pay in full or make monthly minimum payments. The deposit is used only if the account becomes delinquent and goes to collections. A couple of good things is that you can increase the credit limit by adding to the deposit, which can help your score because it creates a much needed cushion between the total debt that's owed and the available credit, and also the deposit is sometimes linked to a savings account which earns interest while you're building credit, so the deposit isn't just sitting there. A good way to build credit with the card is to make small purchases ($20/month max) and pay it off on time every month, while adding to the deposit. Usually after a year or so, of paying it off on time, the card either converts to a regular card or it's upgraded to a better card, and most importantly the deposit isn't needed anymore and it's given back. My suggestion would be to open another secured card and repeat the process or open 2 at a time, which would speed things up. If you make small purchases, pay it off and increase the limits, that will really help your score. In the end, you'll have 2 credit cards with decent limits and an emergency fund from the deposits.

4. Enroll with PRBC- PRBC is America's Alternative Credit Bureau, providing a helpful service to the over 50 million people with limited or no credit history. If you pay your monthly bills on time, PRBC can help you build credit to qualify for a mortgage and better interest rates.On-time payments for the following bills are not reported to the traditional credit bureaus:

Rent

Cable

Phone

Daycare

Insurance

Electric

Natural Gas

Cell Phone

The only time your payments for these bills are reported to the other credit bureaus is if they're missing or late.With PRBC, your on-time payments count. You build credit for paying your bills on time, even if you have no credit history. PRBC has teamed up with Fair Issac, the creators of the FICO score to introduce the FICO expansion score which helps people build credit. Here's a link that explains more in detail:

http://www.fairisaac.com/fic/en/product-...

In closing, just a few more things to keep in mind.

-Don't spend more than 30% of your combined available credit on all your cards.

-Only apply for credit when necessary.

-Pay on time

Hope this helps...

Thanks for reading and...

Good luck!

Answer 3

Not a financial adviser...!!!  but...

Since multiple inquiries around the same time don't seem to bring down your score like multiple inquiries over a period time would, you could apply and get multiple credit cards I (BUT DON'T USE THEM) to up your available credit.

I took out one credit card and my score went up by 30 points.  I don't keep a balance on that card at all.

Answer 4

Join you local credit union and start a regular savings account.

Have as much as you can direct deposited each paycheck even if it is just $10.00

Then take out a small signature loan 500-1000

Put the money in your account and pay off the loan on time with the money in the account.

this will help improve and establish good credit.

Answer 5

Pay at least the minimum payment every month. Pay down your debt. When using credit cards, only charge what you can afford to pay off at the end of the month, and do not charge more than 30% of your credit limit. Do not open any more credit cards. It's pretty much impossible to improve your credit score overnight, but if you make steps towards it now, it will pay off in a few years.

Answer 6

By paying off your debt as soon as possible and start paying your bills on time and in  full. Also consider negotiating a lower interest rate with your credit card company.