How to Improve Your Credit Score Fast
The best way to improve your credit score is to improve your credit history. This however takes the longest amount of time. So what can you do to help improve your credit score while you are creating a "new and improved" credit history? Here are a few ideas that might help you:
Get informed. Understanding credit terminology, what your score is comprised of and why each bit of information is important will help you to take charge of your credit condition.
Your credit history is how you have paid your creditors in the past. There is no quick fix to this bit of information but it is the most important piece you are evaluated by. Still, you can establish better credit history by paying on time every time beginning today.
Your credit score is comprised of five key pieces of information; payment history, credit versus debt ratio, age of credit history, new credit, and types of credit. The most important information, weighing in at 35%, is your payment history. Next at 30% is your debt ratio, or the amount you owe versus the amount of credit you have available. While the age of credit history is only 15% of your overall score and both new credit and types of credit are each only 10% of your score, it all matters. Knowing this will help you create a plan and keep you from making costly mistakes.
Get your credit report. Your credit report shows you a quick glance of similar data the lending corporation see's when you apply for credit with their company. Knowing what is on your report enables you to make changes if necessary and if possible, correct any errors, and speak frankly about any negative information that is unavoidable.
Every citizen of the United States is granted free access to their credit report by The Fair Credit Reporting Act once every 12 months. Check your report for errors and dispute any you find. This is not a quick fix, but it is an important step.
Get busy. Once you are informed you can begin to work towards a plan of credit improvement and management.
The most expedient and effective way to improve your overall credit score is to pay down your balances. Since applied debt versus available credit is the second most critical piece of information on your report this is the quickest way to improve your score. If you cannot pay off the balance of your credit cards, spreading the debt is a less favorable but acceptable way to accomplish a better debt to credit ratio. 30% is the optimal outstanding debt to available credit proportion; therefore it is better to have a small balance on more cards than to have one or two credit cards maxed out while others have no balance.
Finally, address any negative remarks. The reports are made by people and if you have a valid reason for making the negative occurrence reported, such as a lay off or unexpected illness, perhaps they will be understanding and remove the negative comment.