Do you need to boost your credit rating by 100 points or more? Sometimes life puts you in a situation where your credit score is lower than what you need to get financing. While there's no magic bullet to improving your credit score quickly, the following 10 tips can help you increase your credit score by 100 points or more over time.
What is a credit score?
A credit score is a number that represents the likelihood that you will repay a loan on time. Many companies can use your credit score to decide whether or not to give you credit and determine the interest rate you will pay the lender for the borrowed money. A good credit rating in the USA demonstrates your credibility with US lenders.
Rating between 800-850 points
Excellent credit rating. Your chances of being approved for any credit product are high, and you can get the lowest interest rate.
Odds between 750-799 points
Very good rating. You have a high chance of getting your credit application approved, and you can expect favorable interest rates.
Rating between 700-749 points
Average credit rating. You have a chance of being approved for financing, and you can expect above-average interest rates.
Odds between 571-639 points
Poor credit rating. You might only be approved for guaranteed products at a very high, sometimes double-digit, interest rate.
Odds between 300-399 points
Very bad credit, you are a high-risk borrower. If you find yourself in this category, you may not get a loan. If you are approved, your interest rate can be as high as 60%, depending on the province you are in.
How long does it take to increase your credit rating by 100 points?
Raising your credit score by 100 points isn't as complicated as you might think.
1. Pay your bills in advance
Do you often miss your credit payments? How do you feel when you remember that you missed a scheduled payment, and it affects your credit rating? It's terrible, isn't it?
You can set up automatic payment with your bank or credit card company or install a mobile app that helps you track your bills.
If you have any outstanding bills, you must pay them first, before new bills. You can also schedule a reminder using your digital calendar to ensure early payment of bills.
Paying your bills on time is essential as this prevents your credit rating from declining.
2. Have a credible credit history
A solid history increases your credit rating. Closing a credit account shows that you cannot manage your credit, which weakens your file and lowers your score.
To increase your credit rating by 100 points, do not rush to close your unused credit accounts. Leave traces of old, fully paid debts on your credit report and leave credit cards open, even if you don't use them.
3. Spend less than your available credit
How you use your available credit has a big influence on your credit rating.
If you have a certain amount as a credit limit, try as much as possible to spend less and lower your credit utilization ratio. Most creditors check the available credit on your cards and the amount you have spent. It is best to spend less than 30% of your available credit.
Don't overuse your credit card. If, for example, your card limit is $2000, try to keep the balance below $600. Try to pay more than the minimum amount on your credit card.
4. Check your credit report regularly
Spend some time reviewing your credit report. Be alert to any errors and, if you find one, do not hesitate to request a correction from the credit reporting agency.
Having someone else's credit report does not increase your score, hence the need to review your credit report regularly. Also look at other factors in your credit report that are lowering your score and find ways to improve them.
5. Pay your debts in full
Write down the amount of your debts and establish a payment plan for each credit account. There are several strategies to help you repay your debts monthly.
You can start by paying off small debts, except mortgages, using the snowball method. The debt avalanche payment method also pays off the debts with the highest interest rate first. Avoid bad debts, such as accounts sent to collection agencies. This lowers your credit rating.
6. Ask for new credit only when necessary
Try as much as possible to apply for a new credit card only when you need one. Having few credit cards improves your credit rating.
Constant requests for credit are a red flag for lenders, who see this as risky behavior. Before applying for a new card, make sure it's needed and, if possible, avoid debt .
7. Have a mix of credit accounts
Having varied credit shows your credit management credibility. If you make a payment for a car loan, mortgage loan and insurance, you should have different types of accounts in your report.
Some lenders like to see different types of credit on your report before they give you new credit. However, don't get a loan just to diversify your credit.
8. Increase your credit limit
The credit limit is the maximum amount you can spend with your credit card or line of credit. You can request an increase in your credit limit from the credit card issuer or lender. Do your best to spend less than your credit limit.
Although increasing your credit card limit increases your rating, you should be careful not to spend more than your available limit. For example, if you are requesting an increase in your credit card limit from $3000 to $5000, try to keep your balance below $1500.
To improve your credit rating, the balance on each personal credit card or line of credit account must be less than or equal to 30%. By spending less than 30% of your credit limit, you can increase your credit score by 100 points over time.
9. Keep your old credit card
The age of your credit account is one of the factors that affect your credit rating. It can be tempting to close your oldest credit card, but it can affect your usage ratio and lower your credit score. Try to have some transaction activity on your old credit card, even if you rarely use it.
However, due to inactivity, your credit card may be canceled by your provider. To avoid this, you can gradually build your credit history by setting up automatic payments for smaller expenses, such as your monthly subscriptions.
10. Consider getting a secured credit card
If you're just starting to build your credit rating, one of the fastest ways to boost your credit rating is to get a secured credit card. A secured credit card requires you to make an initial payment which serves as a credit limit.
For example, if you make an initial payment of $250 to your credit card company to obtain a secured card, your credit limit will also be $250, and you will be allowed to spend the initial payment.
You can then use the secured card responsibly, and each payment you make gradually increases your credit rating. If you're having trouble getting an unsecured card approved, you can start with a secured card, establish your payment history, and apply for an unsecured card after a while.
Conclusion
If you are looking for how to boost your credit rating for good, the tips mentioned above will help you get there. If your credit rating is low, don't give up.
Pay your debts on time, try not to miss a payment, and check your credit report regularly. If you discipline yourself to have a good credit score, chances are it will continue to increase by 100 points or more.
If you have just searched for fast credit repair near me online, Call us:- at (888) 803-7889 today, and let's guide you on this journey to a better credit score.
Comments