How to Repair and Improve Your Credit Score Fast

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   How to Improve Your Credit Score Fast

Step by step guide to credit repair:

Your credit score is very important for anyone wanting to take out a loan.

Bad credit or a low credit score can determine if you qualify for for a loan.

And if you have to pay a higher or lower interest rate for that loan.

Sometimes even the phone companies, cable companies or landlords check your credit ratings to see if you pay your bills on time.

One of the first steps to improving your credit score is just to find out what you credit score is.

You can do this for free from a number of places like Credit.com, credit karma.com, bankrate .com,

You can also go directly to anyone of the three major credit bureaus that make up the credit reports. Equifax, Experian, and Transunion.

Any of these companies can make mistakes on your credit report so it is advisable to look them over carefully.

If you see a mistake or discrepancy report it to the company.

You are entitled to a free copy of your credit report from each of these three companies once per year.

They can be found at AnnualCreditReport.com. It is best if you spread the reports out and get one every four months.

Here is how most credit scores – including FICO scores breakdown.

Excellent credit is   750 or above

Good Credit   700 – 749

Fair Credit  650-699  –  usually 640 and below is the cutoff number.

Poor Credit  600 – 649

Bad Credit is anything below  600

Use a highlighter and go through your credit reports looking for any mistakes.

Is all of your personal information correct?

  • Name
  • birth date
  • social security number
  • payment history

Double check for all of your accounts, payments that you made on time that they have marked down as missed or late.

Reporting errors can occur for people with common names – Jones, Smith etc.

If you find an error you will need to file a separate dispute for each error and each reporting company.

One of the most important items for determining your credit score is your on time payment history.

This one factor is heavily weighted in calculating your credit score.

That is why it is so important to make those payments on time each and every month. If you want to keep your credit score up then don’t be LATE!

The second most heavily weighted item to factor into you credit score is your “credit utilization ratio”.

O.K. so what the heck does that mean?

The “credit utilization ratio” is a fancy way to calculate what percentage of your available credit line have you used on your credit cards.

Typically the banks and lenders only want to see around 30% or less on any one credit card.

So if for example you have a $1000.00 line of credit on your credit card, then the bank wants to see that you balance on that card in $300 or less.

On the other hand, if all of your credit cards are maxed out to the limit then that would send up a red flag to a very conservative banker when you go in to apply for your loan.

By keeping your credit card balances low (below the 30% of total credit line), you can reduce your “credit utilization ratio” and show the lender that you can manage your finances and your credit responsibly.

Some other things to consider when trying to improve your credit score is to avoid applying for any new credit accounts.

Opening up a new account creates a “hard inquiry” on to your credit report.

Every time someone runs a credit report on you it creates an inquiry. Too many credit inquiries in a short time span will also take down your credit a notch or two.

A good to excellent credit score is important to your overall financial wellness.

You want to be aware of what effects your credit score and be vigilant in keeping your credit score as high as possible.

Most of all be patient when improving your credit score.

Your credit score is always a work in progress.

Your credit score did not go down overnight so expect it to take some time to build it back up.

If you keep paying your credit cards and debts on time, month after month you will soon start to see your credit score creeping up higher and higher and improving over time.

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