(You Can) Improve Your Credit Score in 30 Days: 5 Ways
In the world of finance, a good credit score is like gold. The better your score, the more it can open doors for you.
A good credit score allows you to enjoy better interest rates and more favorable loan terms on personal and auto loans. It also means you can enjoy higher credit limits on your credit accounts, new or existing.
That’s why you want to guard a good credit score as if it was treasure because it is!
But what if your credit score needs a little work? Can you really improve your score in a month?
Yes, you can improve your credit score in 30 days. However, to substantially improve it takes time. Because good credit is so valuable, make the commitment to focus on your personal finances and credit history.
If your credit score needs work, start now so you can see a bump in your score in the next 30 days. Here are 5 great ways to do that.
Got Credit Card Debt? Pay It Off!
Credit card companies report each month to the three major credit bureaus on your current credit balance. This reporting can occur on the same day you receive your statement.
That’s how the credit bureaus calculate your credit utilization ratio, and that is a big factor in determining your FICO score.
To put it simply, the credit utilization ratio calculates how much of your available balance you are using. Let’s say you have two credit cards each with a $2,000 limit for a total of $4,000 of credit.
On one card you owe $500. On the other card, you owe $750 for a total of $1250 debt. To get your utilization ratio, divide 1250 by 4000 to get a ratio of 62.5%.
In the finance world, that’s high. Always try to keep your ratio below 30%. A utilization ratio over 50% will lower your credit score.
By paying down your credit card, or even better, paying it off, you can raise your score. If you can pay it down before your next statement, this will help raise your FICO score. Pay it sooner, rather than later!
Become an Authorized User of a Credit Card Account
Another way to improve your credit score in 30 days is to become an authorized user of someone else’s credit card account. For example, if you have a trusted friend or family member with excellent credit, ask if you can become an authorized user on one of their credit card accounts.
This adds the new account to your credit report which helps your credit utilization because you piggyback off the primary account holder’s good credit history.
But there are pros and cons to this approach. On the plus side, you can build a positive credit history faster.
You don’t have to have the card or use it to become an authorized user. Just having your name on their account is enough, and the primary account holder may not let you use the card or give you the account number.
That’s not important. What is important is having your name attached to an account with excellent credit. You do want to make sure that the account reports to all three major credit bureaus.
The downside is it could negatively impact your credit score. For example, if the primary account holder is late on a payment, misses a payment, or has a high credit utilization rate on the account. With any of these scenarios, it can negatively impact your credit score causing it to decrease.
If you have access to the card and abuse its use, it can cause problems of a personal nature between you and the primary account holder.
Use the other person’s credit wisely. Use the opportunity to budget and manage your own finances.
Ask for a Credit Line Increase
File this one under “Proceed with Caution.” If your budget is tight and you can’t make the extra payments to pay down your credit card debt, asking for a credit line increase from your credit card company can help. This will lower your credit card utilization ratio.
But beware. If you know you’re going to spend more money, increasing your credit card debt, don’t ask for the increase.
Pay Your Bills on Time
It doesn’t matter what strategy you use if you’re not making payments on time.
On time payments are the largest scoring factor for both VantageScore and FICO scoring systems.
Late payments can stay on your credit reports for 7½ years! Don’t risk it. Make on-time payments or work something out with your creditor.
Get an Additional Credit Card Account or a Loan
If you only have credit cards, consider getting a credit builder loan. This can be a low-cost option to helping you rebuild your credit. Just make sure you get a loan that reports to all three credit bureaus.
If you have loans and a few credit cards, you may want to get a new credit card. This helps to improve your credit mix, and at the same time, reduce your credit utilization score.
Bonus: Wrong or Inaccurate Credit History Data? Dispute It
This action may take longer than 30 days to see results but it’s worth the time. Every consumer is allowed one free credit report per year. Use AnnualCreditReport.com, a website authorized by the federal government, to check your credit. This site allows you to pull credit reports from the three major credit bureaus: TransUnion, Experian, and Equifax.
Use it to check your credit report for inaccuracies. If you always make on-time payments but your credit report lists late payments, dispute them!
If you see an account that you never opened or applied for, it could be identity theft. Or it could be a lender reporting error.
It may take some time, usually several billing cycles, to successfully dispute and remove the inaccuracies from your credit report. Both credit reporting bureaus and creditors have 30-45 days to investigate a dispute letter. Then, five days to respond once the investigation is complete.
Here at Joe Bowman Auto Plaza, we want you to be an informed car buyer. Understanding your credit, what affects it, and how to build it is important for all your financial transactions in life.
When you’re ready to buy a new car or one of our quality used cars, our financing department can help you structure loan terms that fit your lifestyle and budget.
Learn more about us here.
A good credit score allows you to enjoy better interest rates and more favorable loan terms on personal and auto loans. It also means you can enjoy higher credit limits on your credit accounts, new or existing.
That’s why you want to guard a good credit score as if it was treasure because it is!
But what if your credit score needs a little work? Can you really improve your score in a month?
Yes, you can improve your credit score in 30 days. However, to substantially improve it takes time. Because good credit is so valuable, make the commitment to focus on your personal finances and credit history.
If your credit score needs work, start now so you can see a bump in your score in the next 30 days. Here are 5 great ways to do that.
Got Credit Card Debt? Pay It Off!
Credit card companies report each month to the three major credit bureaus on your current credit balance. This reporting can occur on the same day you receive your statement.
That’s how the credit bureaus calculate your credit utilization ratio, and that is a big factor in determining your FICO score.
To put it simply, the credit utilization ratio calculates how much of your available balance you are using. Let’s say you have two credit cards each with a $2,000 limit for a total of $4,000 of credit.
On one card you owe $500. On the other card, you owe $750 for a total of $1250 debt. To get your utilization ratio, divide 1250 by 4000 to get a ratio of 62.5%.
In the finance world, that’s high. Always try to keep your ratio below 30%. A utilization ratio over 50% will lower your credit score.
By paying down your credit card, or even better, paying it off, you can raise your score. If you can pay it down before your next statement, this will help raise your FICO score. Pay it sooner, rather than later!
Become an Authorized User of a Credit Card Account
Another way to improve your credit score in 30 days is to become an authorized user of someone else’s credit card account. For example, if you have a trusted friend or family member with excellent credit, ask if you can become an authorized user on one of their credit card accounts.
This adds the new account to your credit report which helps your credit utilization because you piggyback off the primary account holder’s good credit history.
But there are pros and cons to this approach. On the plus side, you can build a positive credit history faster.
You don’t have to have the card or use it to become an authorized user. Just having your name on their account is enough, and the primary account holder may not let you use the card or give you the account number.
That’s not important. What is important is having your name attached to an account with excellent credit. You do want to make sure that the account reports to all three major credit bureaus.
The downside is it could negatively impact your credit score. For example, if the primary account holder is late on a payment, misses a payment, or has a high credit utilization rate on the account. With any of these scenarios, it can negatively impact your credit score causing it to decrease.
If you have access to the card and abuse its use, it can cause problems of a personal nature between you and the primary account holder.
Use the other person’s credit wisely. Use the opportunity to budget and manage your own finances.
Ask for a Credit Line Increase
File this one under “Proceed with Caution.” If your budget is tight and you can’t make the extra payments to pay down your credit card debt, asking for a credit line increase from your credit card company can help. This will lower your credit card utilization ratio.
But beware. If you know you’re going to spend more money, increasing your credit card debt, don’t ask for the increase.
Pay Your Bills on Time
It doesn’t matter what strategy you use if you’re not making payments on time.
On time payments are the largest scoring factor for both VantageScore and FICO scoring systems.
Late payments can stay on your credit reports for 7½ years! Don’t risk it. Make on-time payments or work something out with your creditor.
Get an Additional Credit Card Account or a Loan
If you only have credit cards, consider getting a credit builder loan. This can be a low-cost option to helping you rebuild your credit. Just make sure you get a loan that reports to all three credit bureaus.
If you have loans and a few credit cards, you may want to get a new credit card. This helps to improve your credit mix, and at the same time, reduce your credit utilization score.
Bonus: Wrong or Inaccurate Credit History Data? Dispute It
This action may take longer than 30 days to see results but it’s worth the time. Every consumer is allowed one free credit report per year. Use AnnualCreditReport.com, a website authorized by the federal government, to check your credit. This site allows you to pull credit reports from the three major credit bureaus: TransUnion, Experian, and Equifax.
Use it to check your credit report for inaccuracies. If you always make on-time payments but your credit report lists late payments, dispute them!
If you see an account that you never opened or applied for, it could be identity theft. Or it could be a lender reporting error.
It may take some time, usually several billing cycles, to successfully dispute and remove the inaccuracies from your credit report. Both credit reporting bureaus and creditors have 30-45 days to investigate a dispute letter. Then, five days to respond once the investigation is complete.
Here at Joe Bowman Auto Plaza, we want you to be an informed car buyer. Understanding your credit, what affects it, and how to build it is important for all your financial transactions in life.
When you’re ready to buy a new car or one of our quality used cars, our financing department can help you structure loan terms that fit your lifestyle and budget.
Learn more about us here.
