How To Get Credit Score Up Fast

Check And Understand Your Credit Score

Its important to know that not all credit scores are the same, and that they fluctuate from month to month, depending on which credit bureaus lenders use and how often lenders report account activity. So, while you shouldnt worry if you see your scores rise or fall by a few points, you should take note when a big change occurs.

The two main consumer credit scoring models are the FICO Score and VantageScore. Here are the factors that comprise your FICO Score and how much each factor is weighed:

• Payment history
• Length of credit history

Here are the factors influencing your VantageScore:

• Total credit usage, balance and available credit
• Payment history
• Age of credit history

There are a variety of options for checking your credit score for free.

For example, Discover cardholders can get a free FICO Score from the Discover Credit Scorecard, or anyone can get a free VantageScore by creating a LendingTree account. American Express and Capital One also offer free VantageScores to both card account holders and the general public, though many other card issuers offer free access only to their cardholders.

Here are the tiers that credit scores can fall into, according to FICO:

Mistake #: Closing Your Oldest Account

If you close your oldest account right after paying it off, then youre decreasing your length of credit history, which counts for 15% of your credit score. Instead of closing that old credit card, consider keeping it open and active so you dont accidentally make your credit history look shorter than it really is.

How Long Do Derogatory Marks Stay On Your Credit Report

Your score is determined by the three credit bureaus , but its up to your lenders to contact them to report information about you. It can be as simple as your credit card company reporting that you made a monthly payment on time, increased your debtor decreased your balances. These are all positive influences on your score, but there may be a slight lag in timing due to the reporting process.

In addition to a potential delay in the telephone game between your credit issuer and the credit bureaus, certain financial events can linger on your credit history for years. Unfortunately, the more harmful events are often the ones that stick around the longest, so its best to know what actions will be the biggest burdens:

This may seem ominous, but heres the good news: recency bias is alive and well in the credit scoring world. Even if theyre still present, the old items that appear on your report have less weight than your newer ones.

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How Long Does It Take To Improve Your Credit Score

How long it takes to improve your credit score depends on your individual credit history and situation. Many people can see improvement in as little as a month.

The time it takes to change your credit score is heavily affected by the amount of information in your credit file. If you have a thin credit file with a small number of accounts, any change, even a small one, will have a noticeable impact. If you have many accounts and a long credit history it will take more time and effort to change your score.

Research from FICO shows that it can take 3 months for credit to return to its previous level after closing a credit card account, maxing out a credit card, or applying for a new credit card. Late mortgage payments can affect credit scores for 9 months, while missed or defaulted payments can decrease credit scores for 18 months.

If youve had any of these situations, you can expect your credit score to gradually increase over 3 to 18 months.

How Credit Scores Are Calculated

Credit scores are determined by computer algorithms called scoring models that analyze one of your credit reports from Experian, TransUnion or Equifax. Scoring models may use different factors, or the same factors weighted differently, to determine a particular score. However, consumer credit scores generally share a few similarities:

• Scores are calculated based on the information in one of your credit reports.
• Scoring models try to predict the likelihood that a borrower will be 90 days late on a bill in the next 24 months.
• A higher score indicates a person is less likely to fall behind on a bill, and vice versa.

The vast majority of lenders use credit scores calculated by FICO and VantageScore® scoring models. The most recent versions of their generic credit scores use a score range of 300 to 850and a score in the mid-600s or higher is often considered a good credit score. .

Considering how different credit scores use the same underlying information to try and predict the same outcome, it might not be surprising that the steps you take to try to improve one score can help increase all your credit scores.

For example, making on-time payments can help all your credit scores, while missing a payment will likely hurt all your scores. There are several factors that can affect your credit scores. Here, we’ll focus on the actions you can take to help improve your credit scores.

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Work On Missed Payments

If you happen to miss a bill, youll want to make it up as soon as possible.

When all of your credit accounts are current, the result is excellent for your credit score. It also prevents more late fees and payments from appearing on your accounts.

Youll want to call your creditors about any late payments you have. More often than not, theyre willing to work with you. If the overdue amount isnt 30 days late yet, contacting them may also change the creditors mind about reporting you, which stops your score from going down.

What Happens When You Miss a Payment

You want to act as soon as you realize the payment came and went without you making it. It could quickly impact your score and come with an assortment of late fees.

If you dont want to deal with that, youll need to make sure you respond right away.

Lenders only report your balances to credit bureaus one time per month, so youll want to make sure you call them before that happens. The higher your current score is, the more significant the impact of missing a payment.

It could quickly drop between 30 and 90 points. But why is that?

When someone with a low score misses a payment, those behaviors are already in their current scores. Its a surprise when it happens to someone with good credit, making a more considerable impact.

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Fix Credit Report Errors

Sometimes, banks make reporting errors that hurt your credit score. Even if you havent missed a payment, many consumers overlook the benefits of a periodic credit report review.

Reviewing your credit report is free and only takes a few minutes. You can request free credit reports from Equifax TRU weekly through April 2021.

If you find an error, you will need to file a dispute with the credit bureau. No error is too small to dispute. Ive disputed incorrect phone numbers, which are correctly in minutes, which led me to discover unauthorized accounts .

If the error affected your score, you should see a pretty quick change once the credit bureau corrects the error.

Option 2 Apply For A New Credit Card

Applying for a new credit card is also a tactic that could reduce your credit utilization ratio. By adding a new line of credit, youre essentially boosting your overall credit line, which can help if youre unable to quickly pay down existing credit card debt.

Before you apply, determine the following:

• What type of credit card you need. If you have poor or fair credit, youll want to consider a card meant to help you build a good credit history, such as a secured card. Secured cards require a deposit in the amount of your credit limit, and protect the issuer in case you default on the debt. On the other hand, if you have good credit or better, you could choose to apply for a card that earns rewards or offers an introductory APR period.
• If you prequalify for any cards. Some issuers such as American Express, Capital One, Chase and Discover allow consumers to check if they prequalify. While prequalification doesnt guarantee youll be approved once you apply, it does indicate a better chance.

How much will this action impact your credit score?

Much like requesting a credit limit increase, the amount that getting a new card can improve your credit score depends on the credit limit youre granted on the new card. The lower it brings your utilization, the better for your score.

Consider the following examples:

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Mistake #: Applying For Multiple Credit Accounts At Once

Its ok to shop around to get the best deal when youre trying to buy something specific , but youre hurting your credit score if you try to open too many different accounts in a short period of time.

I had a conversation with a young couple a few years ago who didnt understand this. They were approved for a mortgage to buy a house. They got within a week of closing on the house and decided they wanted new furniture for the house.

So they went to the furniture store and financed about $10,000 of furniture to fill the new house. But they didnt know the bank would do one more credit check before closing.

The bank saw this new $10,000 debt on their credit report and canceled their mortgage!

They lost the house because of it. If they had just waited until after closing, everything would have been fine .

Dont be like that couple!

Raising Your Score Depends On Your Starting Point

Your credit score isnt just a judgment call, its determined through a formula considering five different factors. Listed in order of importance, each of the following factors can raise or lower your :

• Payment history
• Length of credit history

With a history of consistent payments being the most influential factor, a great opportunity is offered to those new to credit cards. Every month you pay your cards bill on time will bump your credit score up, so set a routine and you can grow your creditworthiness quicklyas long as you can avoid missing a credit card payment.

Your is how much of your total credit limit you use across all lines of credit. Typically, you want to keep this figure between 10 and 30 percent to stay in good standing. Opening up new card accounts or getting a credit limit increase can help build credit by decreasing this ratio, but that isnt all it takes. By making the effort to pay off your outstanding balances youll help your credit utilization, thus improving your credit score.

The length of credit history is fancy-talk for the average age of your credit accounts. The longer the account has been open, the better, so you may want to avoid closing an old account to keep yourself out of poor credit. There are cases where canceling a credit card account is the right move, but as a general rule youll benefit from keeping old ones open.

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Dont Change Houses And Jobs Frequently

Lenders want evidence that youâre a stable character. They want to see you have staying power â that youâre not here one day, gone the next. Put simply, they want evidence of stability so try not to change jobs and addresses too frequently.

Looking to change your home loan? Use our home loan selector tool or call .

Improving Credit In A Nutshell

Improving your credit scores can lead to great things. In fact, you can start right nowâlearn more about monitoring your credit, and then get to work trying to raise your credit scores.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Capital One does not provide, endorse or guarantee any third-party product, service, information, or recommendation listed above. The third parties listed are solely responsible for their products and services, and all trademarks listed are the property of their respective owners.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at one or more consumer reporting agencies.

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Pay Off Debt And Accounts

Paying off student loans and other debt can help raise your credit score. One smart way to start hacking away at that debt is to make smaller, bi-weekly credit card payments vs. one monthly payment.

Scheduling automated payments can help you pay down that credit card debt more quickly, which is one of the fastest ways you can boost your scores. And if youve got any accounts on your credit report that are in collections, lenders may settle for a lesser amount if you approach them with a plan to pay the debt back.

Pay Down Your Revolving Credit Balances

If you have the funds to pay more than your minimum payment each month, you should do so. Chipping away at your revolving debt can have a major impact on your credit score because it helps to keep your credit utilization rate low.

“How quickly depends on how quickly the individual creditors report the paid balance on the consumer’s credit report.” Triggs says. “Some creditors report within days of the payment, some report at a specific time each month.” Credit card companies typically report your statement balance to the monthly, but this could vary depending on your issuer. You can call or chat online with your card issuer to find out when they report balances to the bureaus.

The sooner you can pay off your balance each month the better. You can also make multiple payments toward your balance throughout the month so it is easier to track your spending, and it keeps your balance low. And although it helps to even pay off a portion of your debt, paying off the entire balance will have the biggest and fastest impact on your credit score.

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Use Secure Credit Cards

Its also a good idea to use a secured credit card when you can.

These cards require a deposit upfront, which is usually about the amount of the credit limit. You use it typically from there, but these cards are generally better for your score. Youll also need to ensure that you make your credit payments for secure cards on time.

That way, the odds of your credit score steadily increasing are much higher.

Secured v.s Unsecured: The Differences

A secured card needs a deposit before you can start using it, which reduces the risks for creditors, making them a better option for people with lower credit. If you dont pay the credit bill, the issuer can take money from the deposit instead.

Overall, secured cards are suitable for people who need to build their credit. Youll want to have good credit to apply for credit cards, which isnt possible for everyone. Secured cards are a great way to work up to that point.

Unsecured cards dont use a deposit system. However, that means its riskier for lenders. These creditors will be pickier about who they give their cards to. Luckily, building your credit with a secured card shouldnt take more than a year or two.

Once you do that, you can apply for an unsecured card.

Deal With Collections Accounts

Paying off a collections account removes the threat that you will be sued over the debt, and you may be able to persuade the collection agency to stop reporting the debt once you pay it. You can also remove collections accounts from your credit reports if they aren’t accurate or are too old to be listed.

Impact: Varies. An account in collections is a serious negative mark on your credit report, so if the collector agrees to stop reporting the account it could help a great deal.

If the collector keeps reporting the account, the effect depends on the scoring model used to create your score. The FICO 8 model, which is most widely used for credit decisions, still takes paid collections into account. However, more recent FICO models and VantageScores ignore paid-off collections.

Time commitment: Medium. You’ll need to request and read your credit reports, then make a plan to handle collections accounts that are listed.

How fast it could work: Moderately quickly. On credit scores that ignore paid collections, such as VantageScore and newer FICOs, as soon as the paid-off status is reported to credit bureaus it can benefit your scores. In other cases, such as disputing a collection account or asking for a goodwill deletion, the process could take a few months.

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