Effective Methods to Improve Credit Score By 100 Points

credit score

These days, having a good credit score is important since it can greatly improve your life. You stand a better chance of qualifying for cheaper credit services, insurance rates, and good terms when subscribing for utility services.

While increasing your score by 100 points may seem like a tall order, it can be done. Therefore, you should commit to improving your score and enjoy more freedom and most importantly, your prospective employers and utility companies will start looking at you in a different light.

Eliminate all the errors from your current credit report

The federal trade commission has reported that about 5% of Americans have serious errors on their credit reports with the potential to influence the cost of borrowing. Basically, you are entitled to a credit report every year from the major credit bureaus. Once you get the report, take your time and check if there are any mistakes in the entries. Here, you will be looking for anything that shouldn’t be reflected on your credit report.

To have the errors removed, you need to dispute the entries with the creditor. If they are concerned with the well-being of their lenders, they will investigate the matter and act accordingly.  Normally, credit bureaus will respond to your query a month after you file complaints, but you should reach out to them after the creditors have refused to address your issue. When the mistakes are gone, you should see an increase in your scores in a short while. But you shouldn’t stop here, it is important that you monitor your credit report for any new errors that may appear.

Watch your credit utilization

Credit utilization focuses on the percentage of the credit limit you have used. To be on the safe side, keep your loans under 30% of the credit allocation at all times. This applies to credit cards and personal loans as well.

The best way to do this is by making many small payments to lower the outstanding balances. To make this even easier, you can pay every time your purchases arrive home. Another trick is to ask your creditor to raise your credit limit. By doing this, you will be keeping your credit utilization at a safe level as long as you don’t borrow more than you’ve been taking. However, your creditor has to be willing to increase the limit without conducting a hard credit check since this can lower your scores.

If you can’t pay back the outstanding balances, it might be a good idea to consolidate the debts. More often than not, these personal loans come with lower interest rates that can help you pay your debts and improve your credit utilization. Besides, you will be saving a lot of money in the long run.

Since creditors submit reports on a monthly basis, an improved utilization will increase your scores as soon as it is reported. As such, paying your credit card balances could recover your scores by about 100 points in a short while.

Address all your due bills and make sure you pay everything on time

No matter the actions you take to improve your scores, prompt payments have a significant influence on your credit profile. If you’ve lagged behind on a certain payment, try to contact the creditor and make plans to repay. At the same time, request them to withdraw the negative reports so that they will no longer affect your scores.

In the event where your creditor can’t remove the negative remarks, you should still focus on paying any outstanding bills. Basically, having a delinquent account is unhealthy to your scores and the longer you have it the worse it becomes.

A single missed payment will be visible to lenders for the next seven years. However, if you make timely payments, you are counteracting the negative reports with better reports. While this method will not raise your score quickly, it is important if you want to maintain a good credit score.

Reduce Unwanted Expenses & Improve Savings

Many Americans are suffering from debt problems due to their poor habit of not managing their finances properly. A better understanding of finance and avoiding unnecessary expenses can help you ultimately to improve your credit score by some point. Money-saving can help you to repay the huge debt on time.

Consider a secured credit card

When your credit scores are suffering, it can be difficult to qualify for a good credit card from your bank. But you can sign up for a secured credit card that can help you rebuild your credit profile. Although the card is designed to favor your creditor, you stand to win big after a few months of diligent use.

Basically, you will be depositing some money with the card provider but you can’t touch the funds. The money serves as security in the event where you are not able to repay the credit. If you pay your balances on time until you close the account, you will get the deposit back.

In addition, you must pay a certain annual fee but if you consider the fact that you want to raise your credit scores, this is a fair tradeoff. As long as you’ve made the required deposit, the credit card functions like an ordinary card only that it is designed to help repair your credit scores. Here are few tips to improve your credit score.

Final words

The importance of credit scores can never be overlooked. If you plan to borrow a car loan, mortgage, or any other personal loan, having a decent credit score is required for you to qualify for impressive interests and terms. Irrespective of your credit scores, you can easily achieve a 100-point increment on your credit score. In fact, the lower your score the higher the chance of attaining this goal since there are several places you can make changes with immense effects.

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