How is your credit score? Got bad credit? Is it not what you’d like it to be? How can you fix that? Well we are here to offer you some helpful tips on how to quickly build up your credit score to what you would like it to be!
Ironically, if you have a low credit score, you are actually better positioned to quickly make advances than someone with a better credit score than you. But what’s the key to doing this?
1. Get a Student Credit Card
If you are just starting out, many financial institutions offer credit cards designed specifically for students, which tend to have lower credit limits and possibly lower interest rates. Even reward points are sometimes available, which are ideal as you can earn points as you spend money.
2. Pay Your Bills on Time
Pretty basic information, right? But it’s true, your payment history with your monthly bills, and how fast/slow you pay them, makes a difference on your credit score. Late payments, or ones that have been sent to collections, can stay on your credit report for up to 7.5 years. If you are able to show an abundance of positive credit after one misstep, that can help fix the damage quicker, and in the long run improve your credit. Make sure your monthly bills are paid within 30 days of their due dates.
3. Make Payments More Often
Have you tried making smaller, but more frequent payments during the month? These are called “micropayments”. The banks keep track of these with a factor called “credit utilization”. If you are able to keep your utilization low rather than having it build up as you get closer to a bills’ due date, it should benefit your score immediately.
4. Ask for Higher Credit Limits
Now this might be asking for trouble, depending on your situation, but actually if you ask your bank to raise your credit limit, but (important point) your balance stays the same, this can greatly improve your credit score. Again, just make sure that the balance stays the same!
5. Dispute Credit Report Errors
Sometimes mistakes are made and that can hurt you and your credit score. Make sure all your transactions are legitimate and if there are mistakes, you report them and they are removed. Having a good credit score can be hard enough without something happening that is out of your control.
6. Become Someone Else’s “Authorized User”
Do you have a friend or relative who has a long, responsible credit score? You can ask them if they would consider adding to one of their accounts as an “authorized user.” They don’t have to let you use the card, but it can help your credit improve.
7. Get a Secured Credit Card
Also consider getting a secured credit card, one backed by a cash deposit. You would use it like a normal credit card, and the on-time payments all help to prop up that score! The amount of money you put down, say $500, also becomes the card’s own credit line, so if you default on your payment, the bank will use your security deposit to pay off your balance.
We hope this helps in your journey to a better credit score!
Also, if you are looking to get into powersports or a recreational vehicle, but don’t have the best credit score, we can help! Just contact us for more information!