A Fast Way to Increase Your Credit Score

Your credit score is critical to getting loans and credit cards and qualifying for affordable interest rates. Your score may need a quick boost if it is borderline and you need to apply for an important account like a major credit card, auto financing or a home loan. You can accomplish some repair work on your credit records if you know how to file disputes and have money to put toward your bills.

Debt Reduction

High-balance credit credit cards hurt your credit score, but MSN Money columinst Liz Pulliam Weston says that you can increase your score within 30 days if you are able to pay down the owed amounts. Get as much money together as possible and divide it among the cards with the biggest balances. This not only raises your score, but also saves you money in interest because most of your payments goes toward reducing the actual owed amounts. When you just pay the minimum due, much of it goes to the interest, which keeps your debt load high.

Credit Report Disputes

Your credit score is based on the data in your credit reports, so it gets hurt by any negative mistakes in your Experian, TransUnion and Equifax credit bureau files. The Federal Trade Commission (FTC) website advises that you get yearly copies of your reports from annualcreditreport.com, which gives you the opportunity to find, dispute and remove any errors. The bureaus get 30 days from the time they receive your notification of an error to contact the relevant creditors and verify the information's accuracy. They are required to remove any unverified data within that 30-day period, which quickly raises your score.

Settlements

You cannot remove accurate negative credit report entries by disputing them, but some can be erased through settlements. MSN Money columnist Liz Pulliam Weston explains that credit card companies usually deem accounts uncollectable after 180 days of non-payment and get a tax benefit by writing them off. You are still responsible for the debt, and the charge-off is very harmful to your credit score. Remove its effect quickly by negotiating a settlement with the credit card company that includes removal of the charge-off from your credit reports in exchange for paying an agreed-upon amount. Get the terms in writing to ensure the charge-off gets erased in a timely manner after your payment.

Warning

Be leery of companies that promise to increase your credit score quickly for you, even if you have extremely poor credit. The FTC site warns that some credit repair companies prey on desperate consumers by making false claims. No one can erase bad entries from your credit reports if the information is accurate, or legally create a new credit identity for you. Firms that claim to be able to do these things will take your money and give you nothing in return.