How to Repair Credit Quickly

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Although we regularly counsel our clients that it can take some time to significantly raise a damaged credit score, there are times when you may want or need to boost your score rather quickly. Perhaps you need to buy or rent a house soon due to a job transfer. You might be expecting a baby and want to have a more stable financial situation before s/he arrives. Maybe your car is about to conk out on you, and you’ll soon need to be able to purchase a new vehicle.

Whatever the reason, if you want to get your credit score quickly moving in the right direction, there are some steps that can speed up the process.

  • Fix any errors: Before you start taking any other actions at all, be sure to check your credit report for any mis-reported information that may be unnecessarily dragging your score down. Commonly seen errors include debt that you already paid off that hasn’t been reported as paid, debt that doesn’t belong to you and credit limits reported lower than your actual limits (makes it appear that your cards are maxed out when they aren’t).
  • Use your credit cards: That’s right – surprising though it may be, you need to demonstrate the ability to use your credit cards wisely for your credit score to rise. The keyword here is obviously “wisely,” so be sure that you’re charging only 10-30% of your credit limit monthly – and pay it all off every single month.
  • Negotiate: Whether or not you’ll be able to convince a credit card company to forgive any of your debt is debatable, but you can usually negotiate your credit card’s interest rate as well as your credit limit. The more you charge each month, the higher your limit should be so that you’re only using a maximum of 30% of your extended credit. Any more and your credit score’s upward climb will halt.
  • Pay off debt: This tip probably goes without saying, but some people don’t realize they’re carrying too much debt. Some credit card use is good, as mentioned above, as it shows your ability to control your spending. However, if you have multiple credit cards that are maxed out, you’ve simply got to pay them down. If paying them all off at once isn’t something you can do, work hard to throw as much money at them every month as possible. Getting a nice tax return this year? Put all or most of it toward your credit card debt.
  • Be on time: In addition to making sure you pay your credit card minimums every month, pay close attention to your other monthly obligations. Paying all of your utility and other monthly bills on time month after month looks very good to the credit bureaus and will give your score a nice jump. You may also want to consider paying your credit card bills two times a month if you can only afford the minimum payment. Paying once just after each paycheck will ensure that you attend to your debt before spending more money.

 

Image credit: Ozzy Delaney

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