Have you been trying to find ways to quickly repair your credit so that you can buy a house or qualify for a car loan? It seems the only time people think about how to quickly repair their credit is when they need to apply for new credit and their credit score already sucks. A lot of banks have tighter regulations and criteria for offering credit to customers. Many banks won’t give out any type of credit unless applicants have at least a credit score of 700.
The good news is that repairing your credit is easier then you think.
Everyone has a different financial situation, though, so make sure you use steps that are going to be beneficial to you and your situation.
Common Credit Report Errors
The most important step, when you want to quickly repair your credit, is to review your credit report (credit score) to make sure there are no errors.
Look for accounts that you have paid in full but are still listed as having an amount owing.
Also watch for transactions on your credit report that are not actually yours, and should not even be on there.
Contact the credit bureau that you got your credit report from, and dispute these transactions and get them removed from your credit report immediately.
Once that is done you will see your credit score increase very quickly!
Look for Delinquent Accounts
Any of your accounts that are delinquent (unpaid) need to be addressed right away and the accounts need to be paid off quickly.
When you have delinquent accounts (any account that is past due), you get a negative mark on your credit report and that is going to cause a big drop on your credit score.
Speak to the companies that you owe money, and set up a payment arrangement, so that they see that you are getting your finances in order. This is going to encourage them to assist you with your efforts to follow a plan to pay off the debt.
Pay in a Timely Manner in Order to Quickly Repair Your Credit
As much as 35% of your credit score is based on your repayment history. If you have late payments (even one day late) they will be reported to the credit bureaus and that will lower your credit score.
To prevent this, set up a personal budget and set aside money to pay all of your creditors on time.
Start making smaller payments a few times a month so that the total payment is done in a timely manner and in full.
That is often easier to fit into your budget and will keep you from making late payments.
Watch Your Outstanding Balances
As much as 30% of your credit score comes from the amount of debt that you have compared to the amount of open credit you have available.
As you attempt to quickly repair your credit you want to keep your outstanding balances at 30% of your credit limit, or less.
For example, if you have $3000 available on a credit card, you don’t want to carry more than a $900 balance. Reduce your balances as much as possible if you want to quickly repair your credit score.
Should You Consolidate Your Credit Card Debt?
In some cases, consolidating your debt may be the best way to quickly repair your credit. This is true if a few of your accounts are past due or you have a few credit cards maxed out to their limit. In this situation you may want to apply for a debt consolidation loan.
When you combine all your past due or maxed out credit card debts into a debt consolidation loan, the creditors have to show you are paid in full on your credit report. This is because the debt consolidation loan is used to pay off everything that you owe on your credit cards.
The next step is to make sure that you continue to limit your credit card spending and ensure you pay any amount owing in full each month.
Now remember, you are working on repairing your credit, so the last thing you want to do is to close all of your credit card accounts.
Some people think that doing that is a great idea. But the opposite is true. You want to leave those cards open because that shows that you have established a credit history, which is important if you want to improve your credit score.
You can find a lot of tips on how to quickly repair your credit, but you need to make sure the ones that you choose to follow are a good fit for your personal financial situation.