The recent economic troubles sweeping the nation have caused millions of individuals to do things that have harmed their credit score. Some people have missed payments while others have maxed out credit cards attempting to maintain the same quality of life that they enjoyed before the economic crisis hit. If you know that you have harmed your credit score by your actions, it is very important to try and improve your credit score as fast as possible. Here are some tips for improving your credit score quickly.
Review Your Credit Reports
Every consumer is entitled to receive one free credit report per year from each of the three major credit-monitoring bureaus, making it easy and inexpensive to obtain your credit reports and check them for errors and negative information. Any errors on your credit report should be reported to the credit-monitoring bureau in writing so that they can be investigated and removed from your credit report as soon as possible. Experts estimate that nearly 25% of credit reports contain errors that can lower the person’s credit score and fixing these errors can result in an immediate credit score increase.
Review Your FICO Score
Although your FICO credit score cannot generally be obtained for free, it may be in your best interest to pay for your FICO credit score to see where you stand financially. FICO credit scores of 740 or more are considered to be “excellent” and receive the lowest interest rates for credit product, while individuals with credit scores of 620 or less receive higher interest rates and have the possibility of being denied credit altogether. Checking your FICO credit score can show you where you fall on the scale and give you a good idea of how much must to be done to repair your credit.
Set Up Automatic Payments
Automatic bill payment services are some of the best tools for avoiding late and missed payments. A single missed payment on a mortgage can drop your credit score by 100 points and it can be difficult to make up this ground once it has been lost. Set up automatic payments through your bank for your recurring bills, such as housing payments, car payments, and utilities, to ensure that your bills are paid on time and paid in full.
Reduce Your Total Amount Of Credit Used
Using more than 50% of your available credit can cause a significant decrease in your credit score and even using 30% of your available credit can be harmful. If the balances of your credit accounts are close to the limit, you should work on paying down the balances as quickly as you can to lower your credit utilization ratio. Decreasing the balance of your credit accounts will result in an almost immediate increase in your credit score.