Quick Ways to Rebuild Credit

Rebuilding credit takes time and effort. A bankruptcy or adverse action such as a judgment, foreclosure, short sale or debt settlement, can remain on your credit report for 10 years. However, although rebuilding credit can be a slow process, there are a few steps you can take to try to rebuild credit more quickly.

Pay down debt

Thirty percent of your FICO score is based on your debt-to-credit ratio. The more money you owe, the lower this portion of your score will be. If you can keep your credit usage to 30 percent of your available credit, this component of your score will go up and improve your overall score. If you pay down your debt, this can lower your debt-to-credit ratio and improve your score.

Another way of altering your debt-to-credit ratio is to raise your credit limits. However, since inquiries (examinations of your credit report) hurt your score (inquiries make up 10 percent of your FICO score), you should not apply for higher credit limits unless your creditors are willing to raise your limit without checking your credit report.

Remove late payments

Sometimes, creditors will be willing to remove late payments from your credit report. Creditors will generally do this only if you are paying on time now, and if you are still a good customer. When creditors are willing to do this, it is usually a one-time show of good faith and they will not continually do this for you.

Since your payment history makes up 35 percent of your credit score, improving this component of your score by removing late payments can make a dramatic impact on your credit score.

Become an authorized signer

The fastest way to rebuild credit is to become an authorized signer on someone else's account. When you become an authorized signer, the account is listed on your credit report as if it were your own. If you become an authorized signer on an account with certain characteristics, you can dramatically improve your credit score.

If it is an old account, having it listed on your report can extend the average age of your credit. The age of accounts makes up 15 percent of your score, and a longer history is beneficial. If the account has a good payment history, this can improve your own payment history record, which makes up 35 percent of your score. If the account has a high limit and a low balance, this improves your debt-to-credit ratio, which makes up 30 percent of your score.