Your credit score is at it’s lowest?
You’re asking yourself: “How can I quickly rebuild my credit?”
No need to panic! There are tons of different techniques and small tweaks that you can do to regain your “financial reputation” among the creditors.
Here are a some of them.
Read: How Much Does The Average Credit Repair Cost?
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How Can I Quickly Rebuild My Credit?
Here are 7 tips to quickly rebuild your credit.
1. Maintain Your Utilization Rate Below 30%
Paying your card balance by the end of the month is not enough to rebuild your credit score quickly. Indeed, you also need to take your utilization rate into account.
The “perfect” utilization rate lies around 30% and below. This means that if you have a credit card with a 1000$ limit, your balance should never go over 300$ by the end of the month (and of course you have to pay off your monthly balance too).
2. Pay The Balance BEFORE The Deadline
Whether it be your credit card balance, your internet bill, your utilities bill or even your phone bill, try to pay the balance prior to the monthly deadline.
In theory, there’s nothing wrong with paying your balance on the due date. But, paying on the last day doesn’t give you room for error. If you forget about the bill and miss it by a day, your credit score gets affected.
3. Don’t Cancel Your Credit Cards
In the credit score world the age of your credit matters. That’s why you should always keep your old credit cards (especially the oldest one). Cancelling the credit card reduces your utilization rate and reduces the length of your credit history.
And, this doesn’t only apply to credit cards. Always keep your oldest financial products (unless they really affect you financially of course), whether it’s your first 500$ credit card or something else.
4. Pay Your Credit Cards First
If you want to reduce your debt and increase your credit score, we recommend that you always start by getting rid of your credit cards balances first.
Why?
For 2 main reasons:
- Credit cards debt usually costs way more in interest on debt than most other type of credit.
- Having more high interest debt on your credit history looks worse to creditors than having the same amount of low interest debt.
5. Diversify Your Credit
If you have different financial products on your credit history, such as a personal line of credit, a car loan, a mortgage, it shows creditors how well you can repay your debt and how much monthly payments you can handle at a time.
Of course, this only works if you are able to make the payments on time. If you have tons of different debt and are not able to make your payments, your credit score won’t improve.
6. Do Not Apply For Multiple Loans At The Same Time
Whether it be a personal loan for furnishing your new appartment, a simple credit line or a car loan, do not apply for multiple loans at the same time.
Doing so will greatly impact your credit score negatively. The more financing requests that you make, the more hard credit checks you’ll get on your credit histor. Basically, don’t spam creditors with credit requests, take some time off in between each of them.
7. Prove Your Stability
Of course, it’s a lot easier said than done (since it’s not something that we can always control), but creditors like to see on file that you have a real address, a real job and a stable income.
Why?
Because this is the type of information that they use to qualify you as a client and also to vet your ability to pay back the loan.
Bottom line
There’s an old saying in the “credit world” (if we can call it this way) that says that the banks will only loan money to people that don’t really need it.
Even though it’s not entirely true, it still holds up even today. In most cases, if you don’t want to pay exorbitant fees and interest on your loan, you’ll need a good credit score.
Even though it’s not something that we learn in school, having a good credit score shouldn’t be hard! Hopefully our 7 tips to quickly rebuild your credit score will help you on your journey.
If you need any more help, don’t hesitate to book a call by clicking the following link or the big green button at the top of the page (in the menu on mobile devices). Our professional and accredited network of representatives will gladly discuss your financial situation and offer a credit repair plan for you and your situation for FREE!