Your credit matters in more ways than one. A good credit score can make it easier to get approved for loans, credit cards or other lines of credit. A better score can also translate to lower interest rates when you borrow.
If your credit isn’t as impressive as you’d like it to be, fixing it might be on your to-do list. But how long does it take to get a better credit score? While you can’t wave a wand and improve it instantly, there are some things you can do to make a significant impact in as little as 90 days.
Check your Credit Score
First things first, you need to know where your score stands. You can get your free credit score from Credit Sesame, and also see at a glance what’s helping your score or hurting it. For example, a late payment or two could be dragging your score down. Or a too-high credit utilization ratio (meaning you owe high balances on your credit cards, compared to your credit limits) could be the culprit. Taking a look at your score can give you some perspective on what to do next.
Get Caught Up if you’re Behind and Focus on Paying on Time
Credit scores are based on your credit report, which lists details for your credit accounts. That includes your payment history, which has the most significant influence on your credit rating. If your score took a hit because of late payments, getting those past due bills caught up is a must. From there, you can work on paying your bills on time each month. That won’t erase any late payments, but it can show creditors going forward that you’re committed to keeping up with your due dates.
Ask for a Credit Limit Increase
After payment history, credit utilization is the second most important factor that affects your credit. If you’ve maxed out one or more credit cards, that can work against you. Paying the balances down could help your score, but that can take time. Asking for a credit limit increase is a quicker fix. The bigger the gap between your balances and your credit limits, the better for your score. The key is to avoid charging up your new credit limit.
Be Strategic about Credit Cards
Working on improving your credit doesn’t have to mean swearing off credit cards completely. You’ll need to pay on time, of course, and you should aim to keep your balances low. Completing a balance transfer is another way to help your score potentially.
Transferring a balance to a card that offers a 0% introductory APR, like the Barclaycard Arrival Plus™ World Elite MasterCard®, can help you pay your debt off faster since more of your payment goes to the principal. That can save you money and chip away at what you owe. It can also lower your debt to income utilization ratio for a credit score boost. Just be sure to read the fine print on balance transfer offers before you commit.
The goal is to clean up past mistakes and create better money habits going forward. Avoid adding new debt is a great way to ensure you are on track and can meet current payments on time. Reducing your overall debt will help ensure good money habits can be built going forward, including making sure your existing obligations are paid on time which is the biggest factor of a credit score.
Good luck tackling your credit issue.
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. I want my three children to handle money better than I ever did at a young age. I have been teaching them as much as I can for the last 10 years. My goal is to continue to champion the financial literacy message and then why I created the “How To Rock Your Money” book. To help teenagers navigate their financial futures. I hope my family’s story of paying off over $100,000 worth of debt will inspire and motivate you to take control of your money. He blogs at BrianBrandow.com