3 Fast Tips to Raise Your Credit Score

Unforeseen events such as job losses, cutbacks, layoffs, or even unexpected medical expenses are causing millions of individuals to have credit problems. They are being held back from getting the new home, car, or job that they want…and are looking for ways to raise their credit score.

Maybe this has even happened to you and you find yourself in a similar situation. With the information in this article, you will begin to have an understanding of what exactly is causing you to have problems with your credit. Once you have identified the cause, you will then be able to work on a solution to improve your credit score. Although there are many factors used by the credit bureaus to calculate your score, there are three that are responsible for up to 80% of your credit score. It is those three that we are going to look at – not only because they make up the vast majority of your score but, also, because they are things that you actually have the power to change.

You can raise your credit score by following these fast tips:

Review your credit report for errors

Credit bureaus are responsible for keeping a record of your financial background and reporting it to potential lenders. One important item looked at by the lenders is your credit history, which shows the different types of credit accounts that you have had and how well you paid on them. This item counts for 15% of your score. Since your score is calculated using the financial information provided by the credit bureaus, you want to make sure that the information being reported is accurate. You need to get a copy of your credit report in order to see why your score is not as good as it should be…and what items may be affecting it. A low credit score usually means that there are items in your credit report being reported as a negative, which is bringing your score down. Once you know what these items are, you can work to fix your report and improve your credit score.

Reduce your debt

If you have many too lines of credit or several huge debts, lenders will look at you as a bad credit risk because you are close to “overextending your credit”. This simply means that you may be taking on more credit than you can comfortably pay off. One of the fastest ways to raise your credit score is by reducing the amount of debt that you have…as your total debt is considered to be a major factor and is responsible for 30% of your score. Lenders are interested in not only how well you have been able to repay your debts in the past but also in the total amount of money that you currently owe. They want to be sure that you are not overextending yourself, either in the number of accounts that you may have or the size of your total monthly payments.

The higher your total debt amount, the greater your monthly debt payments will become…resulting in a higher risk to the lender that you will eventually not be able to repay your debts. You will find that paying down your debt also has a nice side benefit. Not only will you owe less, but the smaller balances on your accounts will result in smaller monthly payments…making them easier for you to pay in the future.

Pay your bills on time

The most important step you can take to raise your credit score is to pay your bills on time. This is an extremely simple thing to do but it works very well…because nothing shows lenders that you take your debts seriously as much as a history of paying them back promptly. This is what every lender is looking for…to be paid in full and on time. The logic behind this is that, if you are currently paying all your bills on time, the odds are good that you will also make the payments on a new debt on time…and that is certainly something every lender wants to see. Experts believe that up to 35% of your credit score is based on this factor…so this simple step is one of the easiest and fastest ways to raise your credit score.

You want to make sure that, no matter what may be happening in your life, you always do your best to keep all of your bills current and up to date. As you can see, the amount of debt that you have and your payment history are responsible for 65% of your score. By simply reducing your total debt and making sure to pay your bills on time, you can take a huge step towards having good credit once again.

The good news for you is that these tips, like many others, are completely under your control. You have the power to change your situation…to fix that low credit score and get your life back.