Your credit score is a three-digit number ranging from 350-800, and it tells lenders whether you are a good credit risk. The higher you score, the better will be your credit score if you want to boost credit score overnight.
You are in a situation today where you are going to apply for a loan, either for a mortgage, or a car, or a credit card. You are having the headache that your current credit score will cause you to be turned down for a loan; or, your interest rate will be unnecessarily high, or you won’t get the amount of money you requested.
So, you need to boost your credit score today. And here is how you can do that.
Read Your Credit Score Report
Perhaps you have paid off a loan or credit card that has not been in the records. Possibly some information is severely out-of-date. The worse part is, it’s feasible that someone else’s information has been aligned with your credit score.
Once you read your credit report, and if there are errors, those companies have a process by which you can get your credit report amended. If there are mistakes, you can improve your credit score by as much as 100 points.
Pay Off a Credit Card
Credit reports include information about your credit utilization. That is the percentage of the money you have available to you in loans, including credit cards, versus the amount you have used. If you have a credit card with a $10,000 limit and your balance is $3,000, your credit utilization on that card is 30 percent. Thirty percent is known to be the high end of credit utilization that lenders want to see.
How Do You Reduce Your Credit Utilization Percentage?
- Reduce the balances on cards where your credit utilization percentage is high.
- Request a higher credit limit
You don’t want to use the money extended to you in a higher credit limit. You want to lower the percentage of available money versus the amount you have used. Credit card companies will increase your limit if your history of paying minimum due is good.
Make a Plan
Your need for a higher credit score is immediate, but you still have to plan to make the changes that are going to get you a higher credit score.
Go over all of your loans – from banks or credit cards – and determine a way to reduce balances on all loans beyond the minimum due. Any loan that you can pay off faster – with multiple payments per month, perhaps – will improve your credit score.
An Easy Ask
If you are close to someone with a high credit score and no real financial problems, ask them to make you an authorized user on one of their credit cards, especially one with a high credit limit. You can tell your friend or family member you will never use the account – don’t ask for a card, don’t put the number into any of your digital pay accounts – but you will be reported to credit agencies as an authorized user on a high credit limit account will increase your available credit against your credit used, decreasing your credit utilization number.
Get Points for Rent and Utility Payment
People who have a mortgage and make their monthly payments get credit for doing so. People who pay a rent bill on time every month do not get credit for it unless they ask. They do get penalized if they miss rent payments, however.
There are rent reporting services you can contact that will send your rent payment history to credit report companies. Use of rent reporting varies depending on the credit report company, but lenders often go beyond the Big Three to look at your credit history.
Improve Your Bottom Line
“I would pay off my credit card balances if I had more money to do so,’’ you say.
Well, you can do so in two ways.
Sell something. We live in a world where the internet is a personal marketplace. You have some stuff you don’t need anymore, and that someone else might want.
Consolidate your credit. Credit card companies offer consolidation loans so that you can reduce the number of cards you have to send a minimum payment to in a month. If the math works – the consolidation loan interest rate is lower than what you pay among your current credit cards – then it is a wise move. However, consolidation loans often have a huge jump in interest rate after an initial period (one or two years, perhaps) and you will want to reduce that balance as much as possible.
There are companies that will help you boost your credit score, for a fee. But if the bottom line works for you, paying a company a fee in order to get more money or a lower interest rate on a loan, or a higher credit card limit, then it is worth it to investigate such a service.