Fast Credit Score Help

If you need to raise your credit score in a hurry, such as when you are ready to apply for a mortgage, you can probably see a significant boost within a month when you have certain problems. However, one of the worst things you can do is go to a credit repair clinic, because it cannot do anything you couldn't for free -- meaning you waste money that could have helped you pay off debt.

Warning

Credit repair companies offer little in the way of fast help other than reciting information widely available on the Internet from reliable sources, such as the Federal Trade Commission and the credit reporting bureaus, according to the legal website Nolo.com. Over the years, credit repair companies have become notorious for suggesting illegal tactics, such as applying for a tax ID number for use as a fake Social Security number. Not only do these tactics rarely work, they can get you in serious trouble.

Open New Credit Cards

In 2010, Congress passed the Credit Card Accountability Act which, in conjunction with a credit crisis in 2008, led lenders to cut credit limits to mitigate risk to their companies. Thus it may make sense to open new credit cards to lower the percentage of your total limit you use -- called credit utilization -- if your utilization ratio is close to 100 percent. Even though opening new accounts lowers your overall account age -- 15 percent of the FICO score -- and new credit accounts have a 10 percent weight, a credit utilization limit that is close to the maximum is usually far more serious, according to Aleksandra Todorova of Smart Money.

Dispute Errors and Use Rapid Re-Score

You should constantly review your credit report for potential errors -- many reports have at least one and some of them could be major, like a collection that belongs to someone else. Once you get the creditor or credit bureau to admit to a mistake, you should use a rapid re-score company to update your report, because the company can change it in a few days, while the bureaus can take months. You can only use a rapid re-score company through a lender and for falsely reported negative items.

Advanced Tactics

Closing accounts is usually a poor tactic, because you lose the credit limit on the card and stop building history, but if you have a balance, the FICO system still reports the limit on the closed account. Thus it may pay to keep a small portion of the balance unpaid to boost credit utilization until you apply for a loan. Also, you sometimes can remove collection accounts when you agree to repay the debt in full. The debt collector or original creditor might agree to remove the account in the credit bureau's file system for a full payment, but always get any agreement in writing. Having a lawyer draft the agreement could prevent the debt collector from including provisions that might get him out of removing the item.