Unfortunately, there is not a button that you can push that will fix your credit score. However, there are several things that you can do to help you get credit score where you want it to be so you can get the loan you need to get the home of your dreams.
A reset button sounds tempting, especially when faced with a less than stellar credit score, but building your credit is a marathon affair. There is legwork involved in getting that higher number.
You can expect most of these tips to affect you credit score in about 30 to 60 days, and that is considered to be pretty quick. If raising your credit score seems impossible, take a step back from the goal and tackle it one step at a time.
1.Request a Copy of Your Credit Report & Look for Errors
In 2013, the Federal Trade Commission shared findings that roughly one in five consumers carries an error on their credit report. If you find an error you can dispute it and get it removed. By removing these negative marks will help you return to the correct score.
2. Write a Negotiation Letter to your Credit Bureau
Better yet, contact the company reporting a late payment to ask if it will campaign for the removal. If a payment was incorrectly reported or if you simply forgot a bill when you were usually 100% on the ball, you may be able to get the late payment removed.
3. Lower your Credit Utilization to Decrease your Debt-To-Credit Ratio
Traditionally, you can lower your credit utilization rate two ways:
- Lower your spending
- Increase your credit
Your credit is largely determined by the amount of debt (credit card and loans) compared with your credit limits. Go back through your spending and consider whether you have spent more than the recommended amount of your credit line ( generally around 1/3 of the limit).
Alternatively, you can request an increase in your credit or open a new card as a way of increasing your credit- to – spending ratio, but this is a risky move if it also results in an increase in spending. Be wary of raising limits if it wouldn’t be financially feasible to pay back any and all spending.
5. Settle Late Payments & Automate Your Payment Schedule
Timely bill pay is gut-wrenching when you are finally strapped, but proactively settling bills will make future payments easier.
Credit bureaus count a late payment starting from the first day of your last late payment, so the sooner you can square the bill, the better. This is particularly true if you can pay off past-due debts before they reach the 30- day, 60-day, or 90- day thresholds. It’s scary to confront the financial challenge, but it is doable.
Once you have settled any late payments, make future payments and takes the mental clutter of scheduling multiple payments off your mind.
