The best and Fastest Ways to Improve your Credit Score

Credit scoring is big business today. Those hoping to improve their credit score and thus reap the financial benefits it brings are bombarded with advertisements promising a quick fix. “Let us help you get the credit you deserve,” credit repair companies proclaim alongside “we are your ticket to credit revival.”

The truth is that credit cannot be repaired overnight, but attention to personal use of credit can improve scores. Once the credit scoring process is understood it is possible to improve credit ratings and then maintain a high score. My Fico, which is run by the Fair Isaac Corporation, the primary credit scoring model company, advises “quick-fix efforts are the most likely to backfire, so beware of any advice that claims to improve your credit score fast. The best advice for rebuilding credit is to manage it responsibly over time”.

Credit repair specialists are unnecessary and costly as they do nothing that the individual cannot do themselves. Improving ones credit score involves three basic components. These are ensuring that credit reports contain no inaccuracies which could be creating an unjustified negative impact; paying bills on time; and reducing debt levels. There are other components of credit scoring which also play a part in determining ones credit score, but issues such as establishing a long term credit history can only be influenced by time.

Consumers are entitled to receive one free copy of their credit report from each of the three major credit bureaus once a year. Additionally if one is turned down for credit a further copy may be obtained. Reports should be checked for inaccuracies which should then be raised and disputed with the reporting bureau. However, only factually incorrect information can be removed. If genuine inaccuracies are removed then ones credit score will improve to reflect the amendments.

Late or missed payments pay havoc with credit scores. It is essential to improve credit that all bills are paid on time, which is best achieved by establishing automated payments. If payments have been missed then they should be brought up to date as quickly as possible.

Reducing the amount of debt one carries is crucial to improving credit. Outstanding debts with high interest rates should be tackled first as the quickest and most effective way of reducing the debt burden. As credit scoring also considers the ratio of debt to credit it is also important to pay down high balances to a recommended 30 percent ratio of available credit. Thus if two debts both carry the same high interest rate, concentrate first on the one that utilizes the most of the available credit limit.

These three steps are the key to improving credit, though there are others which will have some bearing on ones score. Applying for too much credit can damage ones score, but those attempting to improve their score should refrain from taking on additional credit if debt is already an issue. Closing credit accounts can also have a detrimental impact and should be avoided whilst concentrating on improving credit.

Once credit scores are improved it is important to maintain them by adhering to the same guidelines used to improve them. As credit improves and scores rise individuals will begin to benefit from an enhanced credit reputation.