What's the fastest way to improve your credit score?
Attention Spring homebuyers!
Spring home buying season is already well underway, so if you’re looking to improve your credit score, you’re already falling a step behind.
Time to play catch up. But how?
For home shoppers who need to improve their credit score ASAP to get a leg up against competition or take better advantage of current-low rates, personal credit monitoring firm, Experian gave tips on what fast options are available in its recent Periscope. (Check here for the full video).
So what are 2 fast ways to improve credit score?
1. Make payments on time
This is very important: don't be late on those payments. Show you are eager to reduce your debt and that you are actively engaged in trying to improve your credit score. For more advice on how to make this a reality. Check out the list we put further down on this very page.
2. Keep your credit utilization down
According to Rod Griffin, Experian’s director of public education, the ideal amount of credit utilization is less than 10%. Credit utilization is the percentage of a your available credit that you currently use. So, if you have a credit card with $10k limit, you should ideally hold an active balance at around $1k.
If you're looking for more detailed answers, especially given that these are only your fastest two options, check out Experian’s “Ask Experian” website for more information.
For added help, here’s a quiz to find out how well you know your credit score.
Primer: How does credit reporting work?
In many ways, in this case, companies such as Experian keep track of how good you are at paying your bills.
FICO aggregates your credit behavior scores into ONE REPORT.
It is estimated that nearly 90% of lenders use the FICO report to some extent when it comes to improving credit.
Here's advice from FICO on how to get your FICO score "repaired." Note going to the actual site yields further advice:
1. Check your credit report
“If you haven't already, request a free copy of your credit report and check it for errors. Your credit report contains the data used to calculate your score and it may contain errors.”
2. Setup payment reminders
“Also, consider enrolling in automatic payments through your credit card and loan providers to have payments automatically debited from your bank account,” FICO advises, but also warns, “this only makes the minimum payment on your credit cards and does not help instill a sense of money management.”
3. Reduce your debt now
“Come up with a payment plan that puts most of your available budget for debt payments towards the highest interest cards first, while maintaining minimum payments on your other accounts.”
Anyone out there have better advice for raising/improving/repairing credit scores?
Please tell us in the comment section below!