Improving a credit score for the long term requires good credit habits. Developing these habits requires discipline and patience. But once you develop a habit it becomes easy. We’re going to share some of those habits as well as give you some tools that you can use right away. Here are 4 ways to rebuild credit fast.
Pay Your Revolving Account Balances Down to Less Than 30% of Your Limit
Get out your credit card statements. Write down your balances and the interest rate you are paying on each card. If necessary, call the credit card company and find out what the borrowing limit is on each card. Then calculate 30% of each of those limits.
For example, if your limit on a credit card is $3,000, 30% of that limit is $900. Do this for each credit card. Now figure out how far over the limit on each card you are. Start paying down the balance of the card with the highest interest rate first until your balance is under that 30% mark. Make minimum payments on the other cards while you’re paying the card with the highest interest rate. Then move on to the next card. Continue this process until all your credit card balances are under 30% of your limit.
By doing this you will not only raise your score by lowering the balances to under 30% of the credit card limit. But you’ll also save money by eventually paying less interest on your high-interest rate cards.
Note- for a quick boost to your credit score call your credit card company and ask them to increase your limit. This may bring your balanced owed under the 30% mark. We don’t recommend this unless you are disciplined enough to not use that additional borrowing amount.
If You Rent, Get Your Rental Payments Listed on Your Credit Reports
If you rent a home, condo, or apartment, get credit for it by having your rental payments put on your Transunion and Equifax credit reports. Because landlords and property management companies only report rent payments on your credit report when you are late, you need a service for this. Fortunately, we have this service for our clients.
Read more about How to Build Credit by Paying Rent and then contact us. The amount it costs you to have this done is far less than the amount you’ll save with a higher credit score. We’ve seen scores increase by 30 to 50 points.
Consider a Credit Builder Loan
In many cases, one of the reasons why a credit score is low is because there are not enough positive accounts on a credit report. One of the ways to rebuild credit is to take out a small loan with a company that specializes in credit builder loans. For example, you can get a $1,000 loan that is to be repaid over a year. Use the $1,000 loan to pay the loan back. It may cost you around $100 over that year in interest but that cost is well worth the increase in credit score. To learn more about credit-builder loans visit our webpage Boost Your Credit Score.
Look at Your Credit Reports
Obtain a copy of 1 or all 3 of your credit reports by visiting www.annualcreditreport.com. You are entitled to a free credit report from each of the 3 credit reporting agencies (Experian, Equifax, Transunion) once a year. If you only get one report, we recommend getting your Experian report.
Look for derogatory or negative accounts. If you have derogatory accounts that are older than 7 years (10 years for bankruptcy) or have erroneous information, the credit reporting agencies are obligated by law to remove them. If however, you have derogatory accounts that occurred within the last 7 years and contain accurate information, you will need help in attempting to get them removed from your reports.
For an understanding of the process of getting items removed from a credit report, visit our page Credit Repair by Experienced Professionals and book a phone appointment with us. Or, simply click below to book an appointment now. We’ll ask you to share what derogatory accounts you have. Then we’ll help you understand the process and the federal law governing the removal of these items.
4 Ways to Rebuild Credit
By using these 4 ways to rebuild credit and adopting good credit habits, you can have a good credit score. By doing so you’ll be able to lower interest rates on existing debt and get better rates on future loans and credit cards. This will save you an enormous amount of money over your lifetime.
If you need further help with any of these ways to rebuild credit click below to book a phone appointment with us for a day and time that works for your schedule.
Book a Phone Appointment With Us
Please Note- Appointment Calendar is Set for Eastern Standard Time
This article which was originally posted in 2020 is updated regularly and was last updated in July 2023.
ERA Credit Services is an Independent Advisor
and does not directly provide credit repair services nor do we accept funds from clients for credit repair services.