Your credit score dictates your financial life in almost all ways. You get better interest rates and credit card terms with higher scores, and you also get to save money when you have a good credit score. Improving credit scores may take time but is always worth it in the end. Also, the sooner you address your low credit scores, the faster you can improve them.

These steps should help you get a handle on your credit score quickly to qualify for a loan on suitable terms.

More Reasons Why a Good Credit Score Matters

A good credit score means that you can manage your debt better. A high credit score also means that your loam credibility increases as well. As per the FICO model, an ideal credit score is 850.

There are some unparalleled benefits of a high credit score. You can get high loans against easy payment options. Your interest rates are also lower, if your score is high.

You will get credit from the most competent banks in the US with a good score also.

These steps should help you get a handle on your credit score quickly to qualify for a loan on suitable terms.

1. Impact of Critical Disputes in the Credit Report

The Federal Trade Commission conducted a study in 2013. It was found that there are mistakes in the credit reports of one out of four people.  

These mistakes are detrimental for the credit health of individuals. So, you must be on the lookout for these mistakes.  

You get a free credit enquiry from all three credit bureaus.  

You can visit https://annualcreditreport.com/ to get free credit reports.  

If you keep these mistakes in check, you will be able to improve your credit score fast.  

AT the same time, you can also raise a dispute. Whenever you find issues in the credit report or spot errors, you can rase a dispute.  

Creditors mostly et 30 to 45 days to validate your debt related data. If you raise a dispute, it cannot be validated. As a result, the disputed data is removed from your file, by default.

2. Apply for the New Credit Cards

You can increase credit score fast when you apply for a new credit card. When you get a new higher credit line, it increases your credit score. 

How? 

Your overall credit limit increases. As a result, the credit utilization value goes down. 

For instance, you had $5000 credit limit. You had exhausted $3500. Now you get another credit card with a credit line of $1500. Then, you have a net credit balance of $6500.  

But you utilized only $3500. Therefore, you have $2500 more to spend now.  

As a result, your credit utilization percentage goes down. Ideally, your credit utilization should be at 25% of the available limit.

3. Consolidate Your Debt with Term Loans

A consolidation loan helps you to reduce your credit utilization dramatically. Again, you can increase credit score fast by reducing credit utilization.  

As your loan is authorized, you can use it to pay off the outstanding loans immediately. 

As a result, your credit score gets an immediate revamp.  

After that, avoid using your credit cards in the interim period.  

Make a cash dependent budget or curtail your expenses on a temporary basis. But don’t renounce the existing credit cards. Keep those active for the time being. 

When the loan term ends, you will not have any debt left.  

If you follow this procedure, your credit score gets a strong kick.  

As you pay off your credit card bill, your credit utilization comes down to 0.  

Then you can increase credit score fast with on-time payment of the consolidation loan.

4. Use Smart Credit for Interactively Assessing Your Score

Smart Credit is a kind online credit score tracking and modulating platform. You can use it to keep tabs on your credit score and improve it. Smart Credit provides information on the activities that are damaging your score. It also offers a 120-day plan to improve your credit

5. Pay Your Bills on Time

Lenders want to know that you are responsible for your debt. The best way to determine that as per them is to check how proactive and reliable you are with bills. Your payment performance is a great indicator of your future performance. Make sure you pay all your bills on time, including utility bills. You should take special care to pay your student loans, auto loans, rent, phone bills, credit card bills, and others on time too.

It is a great idea to use online tools and resources to never miss a payment date. You should also consider setting up calendar reminders or automatic payments. If you are currently behind on payments, try bringing them as current as possible.

6. Get Credit for Bill Payments

You can improve your credit score by factoring in your cell phone and utility payments. This is if you have been fairly consistent with making those payments. You can get in touch with Experian ExperianBoost to identify telecom and utility payment history. The payments will be added to your credit file and an updated FICO score will be provided in real-time.

7. Manage Your Debt and Card Payments

Your credit utilization ratio plays an important role in your credit score. You need to pay off as much debt as possible and keep balances to a minimum on credit cards. This holds true for all other forms of revolving credit lines as well. Lenders don’t like anything above a 30% credit utilization ratio.

Often, people with the highest credit scores have the lowest credit utilization ratio. This tells lenders that the applicant is in a healthy space financially speaking and has not maxed out all their credit cards. It also tells lenders that you know how to manage credit and debt.

8. Don’t Apply for Unnecessary Credit Accounts

Opening accounts to have a better credit mix will probably not improve your credit score. It may cause unnecessary harm though. For instance, you probably will not be able to resist temptation and overspend. Keep your cards to a minimum to avoid further accumulation of debt and lower credit scores.

Wrapping it Up

You can increase your credit score fast by taking a consolidation loan or following a better debt management plan.  

But you must take care of a few other steps. For instance, you must not make unnecessary credit enquiries. You should regularly check changes in your credit score also.

Read Also:

• Best Ways to Establish Credit
• 7 Common Mistakes to Avoid When Repairing Your Credit Rating
• 5 Proven Ways to Reduce Your Credit Card Debt
• Minimum salary for credit card applications: Everything you need to know