Working hard to save up a down payment on a large purchase, such as a house or car, does not pay off unless you have a credit score high enough to qualify you for a loan with a low interest rate. If your score doesn't cut it, and the right time for you to buy is now, there are secrets to improve your credit score fast.
Remove Inaccurate Entries
If your credit score is low because of erroneous information, removing that entry on your credit report can increase your score right away. Order a free copy of your credit score from each of the three major reporting bureaus, Experian, TransUnion and Equifax. Confirm that all the information on your history is accurate and current. Old negative information should not show up after seven years. In addition, a bankruptcy, which can lower your score significantly, should not remain on your credit report for more than 10 years, depending on the type that you filed. If you find an inaccurate entry, dispute it in writing with the creditor who placed the item on your report and with the credit-reporting bureau. Include all relevant documentation to show why it should be removed. The result of an investigation will inform you if the disputed entry is removed, and a new credit report will be issued to you.
Increase Credit Limits
Thirty percent of your credit score is based on the amounts that you owe to your creditors. The ratio of card balance you owe to the limit allowed, which is known as your "utilization ratio," plays a big part in determining your rating. Therefore, lowering the balance due on your credit cards, and increasing your limits raise your score fast. If you are a responsible borrower and pay on time, ask the credit card companies for an increase of your limit. This should quickly lower your ratio and increase your score.
Pay Your Bills Early
Your payment history accounts for 35 percent of your credit score. If you have not been paying your bills on time, start doing that right away. Being 30 days late, even once, is reported to the credit bureaus and negatively affects your score. To boost your rating even more, pay your bills before the creditor reports to the bureau for the month. This lowers your balance before it is reported, which decreases your utilization ratio and increases your score.
Get a Secured Credit Card
If you've made some financial mistakes and cannot be approved for a traditional credit card, ask your banking institution if it provides a secured card. Most credit cards are not tied to any collateral, or are unsecured, and you essentially borrow the money from your card company every month until you pay your bill. However, secured cards are tied to bank accounts to which you deposit money before the card can be used. Some of these issuers report to the credit bureaus information such as whether or not you used your entire limit. Make purchases with only a small fraction of your deposit amount to increase your credit score as quickly as possible.
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