Improving your credit scores by more than 100 points is possible. As is the case with everything in life, starting off is always the biggest challenge. Once you begin, your goals will be achievable. Improving credit scores is a task you ought to take seriously. This is because poor credit scores can affect you financially for a long time. A credit score of around 620 is generally bad. Therefore, your goal should be to improve it to around 720. With a credit score of around 620, you will struggle to find card issuers or lenders who charge you a lower interest rate.
So, what smart money secret should you apply to improve the scores by more than 100 points?
First, focus on knocking off any errors that you see with your credit scores. You can see the errors of your way from any of the main credit reporting bureaus. Interpreting the reports might be hard. Therefore, ask for assistance. The Federal Trade Commission discovered that around 5 percent of consumers walk around with at least an error on their credit reports. The sad thing is such errors could mean paying a higher price for a financial product. You should never keep quiet with mistakes that you notice in the credit reports. Dispute them with the right personnel.
Second, make it a habit of paying all your bills on time. Do this all the time. In fact, your responsibility is bigger if you’re part of the group that walks around with serious errors on the credit report. Study the reports from bureaus such as Equifax, TransUnion or Experian. Study them to identify any account that’s past the due date. What you may not realize is the role payment history plays in credit scores. You can maintain healthy rating as long as you develop a habit of paying all due accounts on time by putting an end to postponing or defaulting your payments.
Third, avoid surpassing the credit limit. In fact, avoid approaching the limit irrespective of the amount of pressure you feel. As previously stated, your payment history plays a crucial role in determining your credit scores. Similarly, your credit utilization also plays a significant role. Focus on paying off the credit cards, especially if you discover that they approach the limits. Whatever you did in the past regarding credit utilization doesn’t matter. What is important is the current credit utilization. Maintain your balances to less than 30% of credit limits.
By following these guidelines, you can improve your credit scores by more than 100 points in a month. To do this, you would have to focus on moving from 100 percent credit utilization and ten credit cards carrying balances to 0% credit utilization and zero cards with balances. This would also require a hefty financial base. If you lack the finances to pull such a feat off, the next best option would be applying for a debt consolidation loan. However, use these smart money secret strategies while not repeating your past mistakes after taking the debt consolidation loan.