Everyone wants to increase their credit scores in order to qualify for better loans and interest rates on their credit applications. By trying to improve credit scores, people are putting themselves in a better position to buy cars, get better jobs, and even start small businesses. Unfortunately, if you’re like most people and have less than perfect credit, your score may be holding you back from achieving your goals.
Luckily, there are a few easy steps that anyone can take to increase their scores and improve their opportunities for success! This article will explain 6 easy ways that anyone can increase their credit scores quickly.
1) Pay off all debts before starting a vehicle or furniture lease
Paying off your debts is one of the most important things you can do to repair and improve credit scores. The bank doesn’t want to extend a loan on a car or home if they think you might have trouble paying it back. However, if someone has no debt and a steady income, then they have a much better chance of receiving a loan. When you pay off old debts, your credit scores will increase because the bank believes that you are a lower risk for them to extend a loan.
2) Have at least 5 Open Lines of Credit
The more open lines of credit you have the higher probability that a bank will grant you a loan when you apply for it. Additionally, the more credit cards and loans you have open the easier it is to improve your debt-to-income ratio which also makes banks feel more comfortable granting you loans.
3) Keep Your Age of Accounts Between 7 Years and 10 years old
The age of accounts on your credit report is just one factor lenders look at in order to determine how reliable you are with paying bills on time every month. If all your accounts are newer than 6 months then banks will feel like they can’t predict how likely it is for you to pay them back on time every month. However, if a majority of your credit accounts are between 7 and 10 years old then it looks like you have a track record of paying your bills on time, which helps lenders feel more comfortable taking a risk with giving you loans.
4) Never Close any Credit Cards or Any Other Lines of Credit
If you currently have credit cards that you aren’t using just keep them open. If you do choose to use them don’t overuse them, but if they sit around without being used they can still increase your average account age by adding another account to your oldest reports. Also, never close any lines of credit such as personal loans or home mortgages because doing so will decrease the amount of debt-to-income ratio lenders will grant you, which doesn’t help as much as increasing the number of your open credit accounts.
5) Always Pay Every Bill on Time Every Month
The biggest thing that lenders like to see is someone who pays their bills on time every month, so if you pay all your bills within 30 days of their due date then this will improve your credit scores quickly. This includes but is not limited to car loans, mortgages, credit cards, student loans, and anything else that may end up on your credit reports. If you don’t think it’s possible to pay every bill every month then try setting up automatic payments for all your monthly expenses where they are deducted at the same time each month from either your checking or savings.
6) Check Your Credit Scores Often
Though checking your credit score won’t improve it, you will be more aware of any changes that happen to your scores. If there are any inaccuracies making corrections on them can raise your average account age by helping the newest accounts appear older on reports, which is good for improving credit scores. You can check your scores free once a week at Credit Sesame or Credit Karma, but many more places offer the service for around $20 per month if you don’t want to bother checking once a week. Also, remember to check both of your FICO 8 credit reports because they are different even though they have the same information on them. (Learn more about what FICO score is and why it is important)
*) Bonus Tip! – Improve Credit Scores Quickly for Free using Experian Boost
Experian Boost is a completely free tool that you can use to instantly raise credit scores anywhere from 5-30 points in less than 5 minutes! All you need to do is create a free Experian account and connect your bank/credit accounts. Once connected, Boost searches your transactions to give you credit for bills like your phone, utilities, and popular streaming services. It’s almost too good to be true, but that’s really all there is to it.
All six of these tips will help one increase credit scores quickly and start seeing better interest rates at banks. Remember the most important thing to help increase credit score is to always pay every bill on time and keep every account current/open.
If you are looking for help improving your credit score, please click below to setup a free credit repair specialist consultation.