How to Improve a Credit Rating Quickly

Your credit score is one of the most important numbers in your life. It can play an instrumental role in your approval for a personal loan, car loan or home mortgage. Unfortunately, many are unaware how credit scores are calculated, and this can make it difficult to fix scores quickly. The two quickest methods for turning your credit score around are correcting errors on your credit report and increasing your available credit. Armed with a plan to tackle these two tasks, you can turn your credit around in a short time with little effort or stress.

Instructions

Clean Your Reports

1

Obtain a copy of all three credit reports. There are three major credit-reporting agencies: Equifax, Experian and TransUnion. Each is required to provide you with one free copy of your credit report every 12 months.

2

Examine your credit reports for errors. If you see any debts that look unfamiliar, or that you know you did not incur, make a note. Call the reporting agency and notify them you believe a debt has been incorrectly reported to your account. Send them a letter stating the same. They will open an investigation, and if they determine the debt does not belong to you, it will be removed. This will instantly raise your score.

3

Dispute any listed debts more than three years old. Just send a note to the credit reporting agency claiming the debt is not yours and requesting an investigation. Even if the debt is indeed yours, the lender who reported it must still provide verification at the credit reporting agency's request. If they do not, the agency will delete it from your report.

4

Request the removal of debts or negative marks more than seven years old. This should happen automatically by law, but it is not uncommon to find one lingering. If you make the credit reporting agency aware, they will get it removed.

Boost Available Credit

5

Pay down your credit card balances as much as you can. Your credit score depends heavily upon available credit. People who "max out" their cards are viewed as poor credit risks, which their ratings reflect. You should use no more than 20 percent of your available credit; thus, if your card limit is $1000, try to keep the balance below $200.

6

Apply for another credit card, if you have only one. Having several helps demonstrate creditworthiness. If you already have multiple cards, simply focus on managing your existing cards.

7

Utilize infrequently-used credit cards. This may seem counterintuitive, but it's much smarter than getting rid of those cards. If you rarely use a card, that company might stop reporting to the credit bureaus, which can damage your credit score. Use the card to make a small, recurring monthly payment and pay in full each month. This will boost available credit, and bring your neglected card back into "active account" status with the reporting bureaus.

8

Request a credit limit increase on one of your credit cards. The key to this step is keeping the balance low, despite your newly-extended limit. Having more credit is only helpful in improving your rating quickly if most of the credit is available, so don't rack up your bill.