Steps To Boost Your Credit Score Fast

steps improve your credit score

Credit score is the numerical representation of how good your credit status is with banks, credit card companies, and other lenders. Surprisingly, these numbers can tell a lot about you, at least in terms of credit and finances. 

If you pay your bills on time and pay off your loans from the past, chances are you have a score that’s enticing to lenders. The higher the number, the better you look in front of them. It means that you are more likely to qualify for loans, credit cards and more favorable terms than to those who have lower scores. 

Basically, credit score is a golden ticket to your next loan. It practically informs the lenders whether you will pass or not. So just like a real ticket, be sure to take care of it. 

We asked the loan experts from Frugal Finances for some advice on how to quickly improve our credit scores. And here’s what they have to say about boosting your credit score fast: 

Study Your Credit Reports 

Knowing and acknowledging the problem is a problem half-solved. That resonates perfectly when we talk about credit reports. Before you can improve your credit scores, you must understand and acknowledge the issues you encountered first. 

There are several factors that will make your credit report look ugly. Late payments and high credit card balances are the main culprit of lower credit scores. If your report card shows such red flags, you might want to settle them right away. 

Pay Your Balances On Time 

Lenders review your “report card” and the first thing they look for are your paying habits. Were you able to settle your most recent bills? Did you have any late payments or non- payment at all? These are initially the questions in mind when you’re being assessed. 

That’s because your payment performance from your most recent bills is a good reflection of how well you will do for the future payments of your next loan. Paying later than the agreed time will negatively affect your image as a borrower. That’s why it’s only reasonable to pay on time if you want to ace your credit score. 

There are techniques which you can use to improve your paying habits. Your bank accounts most likely have mobile app versions that feature automatic transfers. Make good use of that. This way, you won’t have to constantly think of your payment schedules and let the mobile application pay for you. 

You can also set alarms in your calendars to remind you of your next payment! Just make sure that you’re not only focused on your credit cards, auto loans and student loans. It’s also reassuring for your lenders if they know that you also pay your rent, utilities, and phone bills on time. 

Open New Credit Accounts Only If Needed 

If you think that having multiple credit cards will ultimately increase your credit score, forget it. It will only harm your standing instead of improving them. Having a credit card you don’t necessarily need only tempts you to splurge on things you don’t even need. 

When you have these cards, you tend to overspend more than you could pay. And trust us, you don’t want this to happen if you want a higher credit score

Now that we’ve stopped you (hopefully) from opening a new account, don’t even think you can apply for new credits, anyway. If you actually plan on applying for a new credit unnecessarily, here’s our take: don’t. 

The act of applying for a new credit creates a hard inquiry on your “report card”. And too much of this negatively impacts your credit score, too. What’s worse is that these hard inquiries remain on your credit report for two years. 

So as much as possible, open a new credit account and apply for a new credit only when really necessary. 

Target The 30% Credit Utilization Ratio 

There’s no better way to improve your credit score but to pay your dues monthly on time. However, if you find it hard to practice this ultimate rule, maybe you can resort to a more feasible strategy for you. Like the 30% Rule. 

The idea is that you only borrow 30% of the amount of credit that you’re allowed to borrow (credit card limits). Keeping your credit card debt to a maximum of 30% makes you look good in front of your lender and might help you get that new loan you badly need. 

It’s always good to think that a three-figure number can make or break your loan goals, and potentially your financial well-being. If you keep in mind that these numbers are as important as your account numbers, you are likely to be more wary of your actions regarding your finances. 

Maintaining a good credit score will open a lot of opportunities and it always starts with regularly checking your credit reports. From there, you can start applying the techniques that we outlined for you to rebuild your credit and easily achieve a good credit score.

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