Were you aware that having a good credit score is necessary if you want to borrow money or rent a home?
A credit score is essentially a number that demonstrates how well you handle borrowed money. Unfortunately, many people have poor credit because they borrow too much and can’t make payments. This can make it seem difficult to raise your credit score, but you can do a variety of things to raise it quickly.
As soon as you increase your credit score, you’ll have access to higher credit limits and lower interest rates. If you work with a credit repair company, you can get it improved within weeks. However, you’ll see a major increase as soon as you start paying things off and avoiding debt.
Keep on reading to learn how to repair credit fast with just a few steps!
Pay Bills on Time
One of the most effective ways to increase your credit score is to pay bills on time. While this is something that many people overlook, it directly impacts your credit score.
When you don’t pay a bill on time, your score will drop because it shows that you can’t afford the payments. Not only will this make it hard to borrow in the future, but it’ll also be hard to rent a property.
Before anything, focus on paying the bills on time. If you have a plethora of things you need to pay for, you’ll need to make arrangements. If you cannot afford to pay your bills, it’s time to get rid of something.
Pay Off All Debt
Aside from paying bills, the next best way to increase your credit score is to pay off any debt you have. This is something that many people struggle with, but it’s because they approach it incorrectly. Paying off debt is as simple as focusing on one thing at a time.
If you have various debts, you should put most of your money towards the one with the highest interest. The sooner you pay it off, the less money you’ll spend in the long run.
While many people end up doing this, they often forget to make minimum payments on their other debts. This will prevent your score from increasing, despite paying something off.
Use Credit Building Cards
Borrowing money can help you make a fast credit repair, but only if you’re actively paying things on time. After paying off debts and making an effort to pay bills on time, you can start using credit building cards to increase your score.
Those that don’t already have a credit card most likely won’t qualify for a decent card because of their poor credit. However, credit repair services offer cards that typically require you to deposit a certain amount of money to use as your line of credit.
This type of card is perfect for those with poor credit because the only money you’re risking is yours. You set the line of credit, so the card provider won’t lose anything if you miss a payment.
Using a credit card will help you build a history of on-time payments, which will look good to lenders. However, avoid using one until you’ve already paid off other debts. Your credit score won’t increase that much if you’re still borrowing while paying things off.
Avoid Borrowing Money (Aside from a Credit Card)
Throughout this entire process, you must avoid taking out loans. When you apply for something like a personal loan, your credit will take a massive hit because it shows a financial struggle. If you need to borrow money, the only source it should come from is your credit card.
Credit cards are widely accepted as a way to borrow money for small purchases. Although personal loans can give you access to a large sum of money, they should only be used in emergencies.
Any time you apply for a loan, it’ll show up on your credit report. As you gain more credit inquiries, your score will continue to decrease. If you use your credit card, your score won’t drop providing you make payments on time.
Don’t Close Unused Cards
Whenever you’re trying to do a fast credit repair, you should never close unused cards. Many people do this and end up struggling to bring their credit score up because they don’t have much available credit. That said, keeping them will help you increase your score, especially if you continue to not use them.
Lenders will see that you have various accounts open but little debt. If you were maxing out each credit card, your score would drop, but leaving them alone will increase it.
The best thing to do is make small purchases with each card and pay them off after a few weeks. Using several cards will increase the score much quicker than using one. If you check out this page, you can read more about how to repair credit with credit cards from credit repair services.
Start Your Credit Repair Efforts Today
Now that you’ve read this article, you know everything you need to know about how to increase your credit score. We encourage anyone that has poor credit to seek a credit repair company because it’ll open many doors. When you have good credit, you’ll have a much easier time getting loans and renting.
You should start by eliminating all debts, but avoid borrowing anything when doing so. If you’re having a hard time making payments for something like rent, you’ll need to figure out what you can get rid of so that you can. For example, if you make payments on a car, you can sell it and buy a cheaper one.
Check out our other articles for more personal finance tips!