People need to acquire good credit required to get better financial products, may it be loans for a new gadget, credit cards, mortgage or new business opportunities. It is the way to determine your financial reputation and whether you are good at managing finances or not. Building good credit won’t happen overnight, but there are ways on how someone can do it.
We are about to tell you how you can build or rebuild your own credit fast.
A Review on Credit Scores
For a quick review, a credit score is a numerical value used to determine a person’s capacity to manage debt. Credit scores range from 300-800 and the higher the number is, the better the chances of getting a loan. A score of 800 and greater is considered excellent based on the FICO Score Range which most credit companies use.
- Excellent: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
Ways to Build or Rebuild Credit Fast
It is essential to know how credit scores work for you to have an idea of what your score tells about your credit reputation. The next step is how to build it fast, and these are the ways to help you out.
1. Paying on Time
This is the easiest thing to do when you are trying to build your credit fast. Payment history accounts for 35% of the credit score, and it is important to pay your bills on time. This contributes to the biggest factor affecting your credit score, and it’s good to take note of your due dates. Paying at least the minimum required payment before the due date makes a lot of difference.
2. Be an Authorized User
Being an authorized user means you can use another person’s credit card without having the full responsibility of making payments. The owner can be a parent or a relative granting they are willing to help you build your credit. It should be mutual, and they agree to use their own credit card.
It is important that you both agree to have dollar limits each to avoid maxing out the credit limit. Remember that this can have a direct impact on the owner’s credit score if not done properly.
3. Keep Your Credit Card Balances Low
If you have one or more credit cards, we advise keeping the balances low. It is best to keep your balance at 30% of the credit limit or even lower than that. This is where the term “credit utilization ratio” enters, which means the amount of debt you are currently holding. It is the ratio of your balance over the credit limit, meaning that lowering your balance makes the ratio smaller.
4. Know and Correct the Errors on Your Credit Report
It is important to determine whether your credit report tells the right information or not. A negative report makes it even harder for you to build your own credit. Old debt collections and unpaid bills are usually the reasons affecting your credit report. There may be other inaccurate information harming your score, and it is best to settle this ASAP.
To do this, you can order a copy of your credit report from each credit bureau for free from AnnualCreditReport.com. When you receive it, evaluate carefully and see if there are errors reflected. You have the right to dispute and have it corrected by the bureaus. All you have to do is to write to the reporting credit bureau and provide proof of the errors.
5. Working with a Credit Repair Service
Taking matters into your own hands can be stressful and nerve-wracking. Seeking professional help to properly build your credit makes it easier. Credit repair services have added training and experience to work with you. Working with a great credit repair service makes it even easier and faster.
Save yourself the stress, headache, and time by consulting our credit repair professionals here at CreditPlanned. We guarantee to increase your credit score as early as 30 days, and we offer a FREE consultation to help you out.
Book a free consultation today.