A poor credit score can result in denial of an auto loan, mortgage, or even additional credit. There is often no time to waste when it comes to improving the score. A few methods can get the score to a respectable level within 30 days and they require only some discipline.
The easiest way to lower the score is to pay down, or pay off, revolving credit accounts such as credit cards. Most credit scoring systems place a heavier weight on credit card debt than on installment loans. Consumers should get each card and the total revolving line of credit to below 25 percent. They should not worry about paying down the cards with the highest interest rates first.
Though a credit line is there to use, consumers should not use the entire amount each month. The available credit is averaged over the billing cycle , which may be less than 30 days. If the consumer charges the limit of $5,000 and pays it off each month, the credit balance will still reflect a 50 percent usage limit of $2,500. This will cause the credit score to take a dive.
Consumers should ensure that the credit report reflects the proper credit card limits. If errors are found, the credit card issuer should be contacted to update the information. Individuals should not get credit cards from issuers such as American Express and Capital One who do not report credit limits. The credit bureau usually records the highest balance as the limit on these cards, which makes the card appear maxed out.
Doing other things like asking creditors for forgiveness regarding a single late payment and getting student loans to current status will also help. Identifying and correcting errors on the credit report can make a difference as well. The consumer’s credit score will soon be rising toward the sky.