Since poor credit score may cause some serious problems when if you simply want to get a mortgage, apartment, credit card, or a loan if you have bad credit score according to FICO, you would have to try ways for increasing your credit score. If you need to have the loan or the mortgage immediately, there are some steps you must follow to have a better credit score and prove that you would make a responsible borrower.
What can be done in the long term?
There are effective ways that would serve the purpose of increasing your credit score but would have answered in the long term. For example, getting some professional help from credit counselors would indeed respond to your needs but it would take the same time to plan a solid management plan. Also, contacting your creditors to negotiate about the deadlines of the debts may require some time. Thus, if you need to uplift your credit score as immediate as possible, you may want to try some other ways that would yield results faster.
What can be done in the short term?
These methods are called sneaky, tricky, and under-the-radar ways to upgrade your credit score. Basically, by using these methods you can speed up the process of having a better credit score. Surely, these techniques will not miraculously ally and instantly cause a perfect credit score but when done persistently, they will produce good results in a quite short time.
- Find out the time your issuer reports your payment history. The day you need to learn is often called the closing date, the last day of the billing cycle. Later, you need to have your credit utilization ratio calculated, meaning, the amount of credit you used compared to the amount you have available. The trick here would be to pay your bills just before the closing day. In this way, your utilization ratio will be lowered and your credit score automatically will be boosted.
- You should pay down your debt strategically. Bear in mind that the FICO score checks each card’s ratio. Thus, it is better to pay down the card with the higher balance.
- A good way to boost your credit score is paying twice a month. For instance, if you make a payment two weeks before the closing date and then make a second payment just before the closing date, this would create a scene where you have enough money to pay off your big expense at the and of the month.
- Raising your credit limits is a good way. Of course, we do not suggest this strategy to people who tend to overspend because an increase in the limit will not be for shopping. Here, by increasing the limit you want to lower your utilization ratio. You must ensure that your financial situation is stable enough to handle such an increase. For example, if you have not paid any of your debts, then maybe this strategy is not for you.
- Do not be afraid to mix it up. Although this strategy tends to result better in the long run and requires a minimum stable financial position, you may get a mix in your credit by getting different types of loans. At first, your credit score will go down but later it will start to increase.