Your credit score is important to your financial well-being. Lenders often look at your creditworthiness when assessing your risk and determining whether to extend financing to you. The better your credit score, the more likely you are to qualify for higher loan amounts and lower interest rates. If you want the best credit score possible as soon as possible, you may be wondering, How can I boost my credit score in 30 days?
While seeing your credit score climb quite a bit may take some time and effort, there are simple steps you can take today to boost your credit score relatively quickly. Whether you want to apply for a car loan or buy your first home, here are some tips and tricks for improving your credit score so you can secure favorable financing terms.
Check Your Credit Report
The first step is to check your credit report. Annualcreditreport.com allows you to do this free of charge. While in the past you were only able to pull your credit report free of charge once every twelve months, you can now do so more often.
According to the Federal Trade Commission, credit reporting agencies currently allow you to pull your credit report for free every week through the above-linked site. This is a real game-changer for staying on top of your credit and identifying any errors.
So, if you’re looking to boost your credit score in 30 days, you’ll want to check your credit report to ensure all the information appearing on your report is accurate. If there are any errors, you have the right to dispute them. Follow each credit bureau’s dispute process so that they can investigate the matter and potentially remove any inaccuracies.
If the credit bureau finds the error in your favor and the item is corrected, the bureau will notify anyone who has received your report within the last six months at your request. Removing negative items from your report may help to boost your credit score.
Link Bills to a Credit Bureau
Your credit history is based, in part, on your loan and credit card payment history. But did you know you could also get credit for on-time payments for household bills, like cable and utilities?
If you want to boost your credit score quickly, link your bills—like gas, electric, and cable—through Experian Boost. The free feature allows you to get credit for making on-time utility payments. While your score with the other two credit bureaus may not be impacted, linking your bill payments is a quick and easy way to boost your credit score with Experian.
Pay Down Credit Card Balances
Paying your loans and credit cards on time is important to maintaining a healthy score. The next most important factor impacting your credit score, though, is how much you owe. For instance, if your credit cards are maxed out or you have high loan amounts, your debt-to-credit ratio may be too high.
A good rule of thumb is to have a debt-to-credit ratio of no more than 30 percent. For example, say you have credit cards with a total credit limit of $10,000. The amount you owe on those credit cards should not exceed $3,000.
If you find that your debt-to-credit ratio is too high, it could be negatively impacting your credit score. Try to pay down some of your balances to get closer to that 30 percent mark.
Rate Shop All at Once
This one really only applies in certain circumstances, such as taking out an auto or home loan. Even so, it’s a useful tip to keep in mind.
If you’re making a major purchase, such as buying a car or a home, you likely want to shop around to find the lender offering the most favorable financing terms. But your credit score could take a dip if you’re applying for multiple loans and each lender is performing a hard credit inquiry.
That being said, you’re encouraged to rate shop for large purchases, like home or auto financing. So, if you apply for home or auto financing with multiple lenders within a short period, it will be treated as a single inquiry and shouldn’t have too much effect on your overall credit score.
Other Factors Impacting Credit
We’ve already discussed some of the factors impacting your credit score, such as your payment history and the ratio of your outstanding balances to your available credit. These two factors alone account for 65 percent of your total credit score.
Other factors include the length of your credit history, mix of credit, and new credit. Having an established credit history can positively impact your credit score, as can having a mixture of installment debt and revolving accounts. Apply for too much new credit, on the other hand, and it could negatively impact your credit score.
If you’re wondering, how can I boost my credit score in 30 days? you’re likely looking to apply for some type of financing. If so, consider working with a credit union like Mid-Hudson Valley Federal Credit Union. Community credit unions often provide unique member benefits and may even have flexible financing options.
While following these tips may not give you an above-average credit score overnight, they should give you a slight boost in a short span of time. That could make a big difference when it comes to securing favorable financing terms, like lower down payments and competitive interest rates—especially when you find a lender willing to provide personalized service and customized financial solutions.
After all, financing is not one size fits all. So, if you are planning to apply for a loan, find the lender that’s the right fit for you. And oftentimes, that begins right at home in your own neighborhood.