Is it possible to improve my credit score instantly, or is there any solution to fix my credit fast? This is a question on your mind. The short and simple answer is no. There is no shortcut to fixing my credit fast. However, you can boost your credit score by following a few strategic credit improvement steps, typically taking around 4-12 months to get results.
Are you curious about the key factors that determine your credit score? A score of credit depends on different factors like your history of repayment (Did you pay dues on or before time?), utilization and balance of credit (How much did you use from your credit limit?), credit availing duration (Age of credit accounts), new credit (New credit accounts opened recently), and credit mix (Variety of credit accounts), and all these details provide your creditworthiness. Higher credit score is best Personal Finance practice.
Before understanding how to fix my credit fast, let us explore who determines your credit score and the different credit score levels.
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Who Determines My Credit Score?
Credit reporting agencies, or credit bureaus, like Experian, Equifax, and TransUnion, determine your credit score. They analyze your credit history and financial behaviour using data from lenders, banks, and other financial institutions. These agencies calculate your credit score based on factors such as payment history, credit utilization, length of credit history, credit mix, and recent credit inquiries.
You might be curious to know the different levels of credit score and which is the best level before understanding how to fix my credit fast.
Different Range of Credit Score
Individuals’ credit score range can be anywhere between 300-800. Credit score is categorized in different ranges as below. It indicates your creditworthiness.
- Excellent (800-850): It indicates exceptional credit management.
- Very Good (740-799): It is considered responsible in credit and money management.
- Good (670-739): It says your credit management is good. You need to improve it.
- Fair (580-669): It reflects you faced some credit challenges.
- Poor (300-579): It indicates significant credit issues.
If you are in the range of excellent or very good credit scores, you have the best chances of getting loan approval and the most favourable terms. You need to compromise on loan terms if you are in the good credit score range. You can get less credit and a higher interest rate if you have a fair credit score. You may face difficulty in getting credit and be charged higher if you have a poor credit score.
Anyway, you can improve your credit score by following this how to fix my credit fast guide.
1. Check Your Credit Reports
Each year you can get a free Annual Credit Report from credit reporting agencies like Experian, Equifax, and TransUnion. You can get a copy from any of these agencies to review your credit report and see where you need to improve.
2. Pay Your Bills on Time
This is the most important credit score determination factor. If you have a bad credit score and are looking to know how to fix my credit score, then look at your credit repayment history in your report. You might have a bad credit payment history. It accounts for 35% to determine your credit score.
Pay your bills on or even before 5 to 7 days of your due date. Regular and timely payment will boost your score drastically. This is the best and smartest way to fix my credit fast.
Example: If you are using a credit card and the due date is the last date of the month, then try to pay the outstanding amount on the 24th or 25th date of the month.
3. Lower Your Credit Utilization Rate
Try to keep low credit utilization as much as possible. Generally, it is advised to keep credit utilization below 30% on average of your credit limit. If you are utilizing more than 30%, then try to pay your outstanding as soon as possible. This is the second most effective factor to fix my credit fast.
Example: If you have a credit limit of $10,000 and are using $2,500 or $3,000 from it, then it is fair and fine. But if you are using $5,000, then there are higher chances of adverse credit impact on your credit score. Try to pay that credit as soon as possible.
4. Keep Old Accounts Open
The age of your credit account is the third most impactful factor in deciding credit score. It will improve your creditworthiness if you keep your credit account open even after paying all dues. It will help you to improve your credit utilization ratio. Let us understand with an example.
Example: Suppose you have three different credit accounts as below.
- Account 1: Opened 5 years ago with a credit limit of $10,000 and a due balance of 0.
- Account 2: Opened 3 years ago with a credit limit of $5,000 and a due balance of $2,000.
- Account 3: Opened 1 year ago with a credit limit of $3,000 and a due balance of $1,500.
The formula to calculate the credit utilization ratio is due balance/credit limit * 100. Your current utilization ratio is ($2,000 + $1,500) / ($10,000 + $5,000 + $3,000) * 100 = 19.44%, which is below 30%.
Now if you decide to close Account 1, then your ratio will be ($2,000 + $1,500) / ($5,000 + $3,000) * 100 = %43.75, which is above 30%.
5. Refrain from Applying for New Credit
Avoid to apply for new credit account. Every time you apply for new credit, lender will request to review your credit card history. Each hard inquiry can slightly lower your credit score. So, it is advisable to not apply for new credit account in short period of time if it is not necessary.
Example: You recently opened a credit account to buy a home. Now you are planning to buy a car, but you do not have enough money for a down payment. You should avoid opening a new credit account immediately, and it is better to wait a few months.
6. Credit Mix
It is one of the most important factors to decide your credit score. Credit mix refers to the variety of credit accounts you have, that includes mortgages, credit cards, auto loans, student loans and other credit accounts. If you have different kind of credit accounts and paying dues on or before time then it will make positive impact on your credit score. This is one of the best factors to fix my credit score.
Key Takeaways
It is essential to maintain my credit score better to identify myself as creditworthiness. Regularly review my credit reports, pay dues on time, try to keep my credit utilization lower, keep older credit accounts open, avoid opening new credit accounts in short time, and use credit mix to fix my credit fast.
FAQs
How do I fix my credit score asap?
You can improve your credit score by paying dues on time, lower credit use, old accounts keeping open, avoid new credit accounts and using credit mix.
What’s the fastest you can fix your credit?
There is not any shortcut to fix my credit fast. It will take time if you stay desceplined in improving your credit score.
How to get a 900 credit score in 45 days?
Paying down your all outstanding debt is best way to improve your credit score. But it is close to impossible to get 900 credit score in 45 days.
Can I repair my credit myself?
Yes i can improve my credit score by my self by taking required neccesary steps to fix my credit fast.
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