Increasing your credit score is not as difficult as you may think. There are several simple methods that can be used to increase your credit score quickly, giving your credit score a significant boost when needed. This can be very beneficial when you are searching for a mortgage, a personal loan, or a new credit card and will improve your chances of obtaining additional credit products at an attractive interest rate in the future. These tips can be used separately or all together to provide the best results possible.
Correct Credit Report Errors
Most people do not realize that an error in their credit report can cause a significant drop in their credit score and most of these mistakes can be easily fixed if they are caught in a reasonable amount of time. Experts have estimated that nearly one-quarter of all credit reports contain some sort of error, so the chances that you are one of the people affected by this are considerable. Review your credit report at least once per year for errors that can be corrected to increase your credit score.
Federal law provides each person with one free copy of their credit report from each of the three main credit reporting bureaus during each calendar year. You can request all three at once or stagger them throughout the year. To obtain these free credit reports, consumers must go to www.annualcreditreport.com and provide verification of their identity and a mailing address that the credit reports can be mailed to. There are many other websites that claim to provide free credit reports, but in many cases you must enroll in some sort of service program to obtain the report.
Pay Down Your Balances
The amount of your available credit being utilized at any given time is used as part of the calculation of your credit score. If you are using a large percentage of your available credit, your credit score will be lower and the interest rate that you will pay for additional credit will be higher. A person is considered to be an “at risk” borrower if more than 50% of their available credit limit has been used because it indicates that the person is not using their credit properly or they are spending more than they can afford to repay. To give your credit score a boost, pay down all of your balances to less than 30% of your available credit.