Applying for a loan with a bad credit score is not a good idea. We understand your need to get in line with the process, but trust us, taking time to get your numbers in place first will help you in the long run. We know you are thinking about “how to build credit fast?” by now, right? The good thing is we have you covered.
Top 10 ways to increase your credit score
Here’s what you can do:
Pay your existing Debt (if any)
The best way to start your credit-building journey is to pay any debt that you already have. This will improve the utilization ratio fairly quickly. There are two ways to go about it:
- Avalanche method – focus on getting done with your highest-interest consuming debt first, and then in order of decreasing amount. However, be sure not to get penalties in between.
- Snowball method – is more inclined towards paying the smallest balances first. You will still meet the minimum payment requirements for any other cards or yours.
Timely Bill Payment
You must understand that raising a credit score fast is only possible if you start paying bills on time – that is, within the due date. It is possible that a bad payment stays on for like about 7 years on the credit reports, which is not helpful at all.
What you can do is, get in touch with your creditor as soon as the 30-day time is up and inform them that you will pay up as soon as possible.
Resolve Credit Report Errors
You have the option to get free credit reports once from 3 major credit bureaus; examine them and get rid of why errors or discrepancies to build your good credit score fast.
Strategic Credit and Balance Payment
The part of the credit you use is called credit utilization. But here’s the hack, if you use less than 30% or a lower limit on any card, it is better. You should know that the highest scorers usually use lesser than 7%. It is better that you pay before the billing cycle ends so that it helps to increase your credit score.
Apply For Higher Credit Limit
When your credit limit is high and your balance does not budge, it immediately decreases your overall credit utilization, which in turn build up your credit score. If your amount of income is higher than before or you added some years of positive credit experience, you can easily opt for a higher limit.
Removing the threat of getting sued over debt by paying off collections accounts may help persuade the agency not to report the debt.
Become Authorized User
Your friends and relatives can help if they have a good credit score. Ask them to put your name as an authorized user to build up your credit score. This will boost your account and let you take benefit of the original user’s good history.
Add To Your Credit Mix
One more credit account in firm standing will help your credit. In case you only have credit cards, getting a loan, particularly a credit-builder loan, is a low-cost option.
Using An Authentic Credit Card
You can quickly increase your credit score by using a secure credit card. The type is supported by a cash deposit. That means you pay upfront, and the amount is more or less the same as your credit limit.
Apply Credit For Rent and Utility Payment
You can get your on-time rent payment record added to the credit report.
To Sum Up
These 10 ways can help you build up a good credit score that will be one obstacle out of your way in getting your loan sanctioned. Why don’t you get in touch with a professional in Houston from Advantage Finance LLC for help? Get in touch with us today, dial (281) 410-5337.