Ways to Raise Your Credit Score Fast – Four Things You Can Do
Published 1:33 am 28 Feb 2020
Do you need to find ways to raise your credit score fast? In this article, DG Institute founder Dominique Grubisa sheds light on some techniques that can help.
Ways to raise credit score fast
- Use Experian Boost
- Manage Your Credit Utilization Ratio
- Review Your Credit Report Regularly
- Limit Your Credit and Loan Applications
What are the benefits of having a high credit score?
The most important benefit is that a good credit score gives you greater access to financing. A strong credit score makes a bank more likely to accept you for a loan. It also opens up the possibility of getting lower interest rates.
The bank sees you as less of a risk, because you have a solid credit history.
Of course, the opposite holds true if you have a low credit score.
Struggling to access financing is one of the key consequences of a bad credit history. This makes it much harder to buy property, start a business, or do any of the other things you need a loan for.
And a single mistake could be enough to tank your score. That’s what Lisa Fox discovered when she missed one student loan payment. As she told Business Insider:
“Because my student loan provider listed each loan as 19 individual ones, it reported on my credit as 19 missed payments.”
In her case, it took several years for her credit score to get back up to where it was.
Maybe you don’t have that kind of time. Perhaps you’re looking for ways to raise your credit score fast so you can take advantage of an opportunity.
Here are four tips to increase credit score.
Tip #1 – Use Experian Boost
Experian is one of Australia’s leading credit reporting agencies. They’re the people you’ll likely go to if you need to review your credit report. And often, they’re the people you’ll report to when you need to dispute something.
The company has recently released a service called Boost. Experian aims to use this service to help you raise your credit score faster.
If you sign up to Boost, you allow Experian to factor in your utility and phone payments when determining your credit score. Assuming you’re making these payments on time, they can give your score a quick boost when needed.
The organisation says the following about the service:
“After a consumer verifies the data and confirms they want it added to their Experian credit file, an updated FICO® Score will be delivered in real time.”
This is a great way to factor in bill payments that typically wouldn’t affect your credit score.
Tip #2 – Manage Your Credit Utilization Ratio
You also have to consider your credit utilisation ratio (CUR) when trying to improve credit score. This ratio compares how much credit you’re using to how much you have available.
For example, let’s say you have a credit card with a limit of $20,000. Each month, you charge about $6,000 to that card. This means you have a CUR of 30%.
When you have a high CUR, you’re showing lenders that you rely on credit a little too much. This may not actively reduce your credit score, especially if you make repayments on time. But it’s enough to make lenders wary. Plus, having a high CUR puts you at a higher risk of missing payments.
Aim to keep your CUR below 30%.
Tip #3 – Review Your Credit Report Regularly
If you’re not checking your credit report regularly, you can’t see any of the issues you might need to deal with.
The good news is that most credit reporting agencies offer a free annual check. Use this to look for irregularities in your report.
Focus on anything that looks incorrect. For example, you may spot unusual loan applications on your report that you don’t remember making. This suggests that a third party may have done something, either on your behalf or maliciously.
You can dispute these errors.
Another example comes from one of our clients. Rajesh’s credit card provider made a negative mark on his report, which he believed wasn’t warranted.
If you have a similar problem, you can now rely on recent changes to the credit code. Under the code, you can send the creditor a letter requesting all applications and statements they have on file for you.
If the creditor can’t provide these documents – and they often can’t – you can count such issues as errors. That means you can get them removed from your report.
The key here is to stay vigilant and check regularly. Credit reporting agencies aren’t infallible, which means they can make mistakes. If you fix credit report errors, you can give your score a big boost.
Tip #4 – Limit Your Credit and Loan Applications
Did you know that every application you make for credit or a loan gets recorded on your credit report?
This can have a drastic effect on your credit score, especially if you make multiple applications in a short period of time.
As Home Loan Experts explains:
“If you have many enquiries on your credit file then the lenders will see you as a high-risk borrower…
As a result, your credit score is reduced.”
This happens because the lender will assume that your repeated applications got rejected. After all, why would you need to keep applying for credit if you have access to it?
They assume those rejections show that you carry a lot of risk. Thus, they’re even less likely to lend to you.
This is an issue that can often catch you out when you’re trying to buy property. You may make several home loan applications at once to try and get the best mortgage. However, this strategy could backfire and leave you unable to get a loan at all.
The simple tip here is to limit your applications.
If You’re in Debt
Being in debt places you into a precarious financial situation which can quickly snowball into a catastrophe.
One of the clients at DGI Debt Management was a business owner and the primary provider for his family, when the pandemic hit and dramatically reduced his income. In order to continue paying his bills and putting food on the table, he began to take on more debt than he could afford and quickly found himself with $20,642 in debt.
The Debt Management team was able to reduce his debt down to just $3,759, cutting 82% of his total debt off and giving him the breathing room he needed to get back on his feet.
On top of that, he no longer had to worry about the possibility of bankruptcy, or having to deal with creditors anymore.
To find out if the Debt Management team can improve your debt situation, visit DGI Debt Management today.
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