Three Ways to Improve Your Credit Score
It's no easy task to rebuild a credit score. The things that can damage your credit may take only a moment to occur, but they can stick to your credit report for two years or more. Meanwhile, even though you can damage your credit score in a short period of time, building that score back up can take years.
You already know that you can build your credit score by paying your bills on time, but what else can you do to boost your credit score quickly? Here are a few things you can do to repair your credit.
Manage Your Revolving Credit
If you have a revolving line of credit, that means that you have a specific credit limit, and you can keep borrowing against that limit as long as you pay back the funds. For example, if you had a credit limit of $5,000, and you borrowed $1,000, you can now borrow up to $4,000 from that line of credit. However, if you pay back $500, then you now have $4,500 you can borrow from.
The most common example of revolving credit? Credit cards. Your credit cards can make or break your credit score, so you'll want to manage them well. Aside from paying your bills on time, you can boost your credit score by keeping your credit card purchases small. The idea is to have a big difference between the amount you owe and your overall credit limit. The bigger the difference, the bigger the boost to your credit score.
If Possible, Become an Authorized User
This next option isn't possible for everyone, but if it is an option for you, it's a relatively fast way to increase your credit score: consider becoming an authorized user on someone else's line of credit. In this scenario, you would get a credit card with your name on it, but your friend or family member would be the account holder. This person would be responsible for paying back money from any purchases you make with your card.
Sometimes, parents of college students will offer this option to their children. This way, the student has money in case of emergencies, but it's also a way to start building credit early.
If you pursue this option, then the account holder's credit limit can help boost your credit score. However, there are some caveats attached. First of all, make sure that you and the account holder both trust each other. It's also important that the account holder pays their bills on time and has a fairly high credit limit on their own. Finally, you'll want to set up a plan for paying back the account holder if you make any purchases with your card.
Monitor Your Credit and Dispute Misinformation
Finally, keep an eye on your credit report. You have a few options that you can use to keep an eye on your credit for free. If you notice any misinformation on your report, don't be afraid to dispute it. Since mistakes can mark your credit score for years, it's important to combat those mistakes when you find them.
If You Need a Loan Quickly
Building a credit score takes time and patience, but what if you don't have time to wait? For example, what if you need a loan right away, but you know that your credit score will impact your loan prospects?
In that case, some of the best loan sources are community banks and credit unions. These places tend to offer more flexibility than megabanks, so you may still get approved with poor credit. Bundlefi can help you find your loan. Take a look now to see your personal loan options.