Ways to Improve Your Credit Score Fast

Build Credit Fast

Young couple doing their finances at home. They are wearing pajamas and drinking first coffee of the day at the kitchen.

When you are looking for personal loans and would like to build your credit score fast, there are a few ways you might go about it. Improving your credit score can help you to get better terms and interest rates with personal loans, and that can help you save in the long run.

Dispute errors on credit reports

Just one mistake on your credit report can bring down your credit score, sometimes significantly. 

Ensuring these details are correct is one of the easiest ways of improving your credit score, if you find such errors. You can get a free report annually from the major credit bureaus (Equifax, Experian and TransUnion) at AnnualCreditReport.com for mistakes like payments marked late or similar.

Pay off Debt and Keep Balances Low

Another important number for your credit score calculations would be your credit utilization ratio. 

Maintaining a low credit utilization ratio suggests to lenders that you know how to manage credit well and haven’t maxed out your credit cards. By paying off your debt and managing your balances low would be a sign of what some lenders consider as creditworthiness and part of their decision making process when it comes to whether you get approval for a personal loan.

Make Payments on Time

Since your payment history has the biggest impact on your credit score, it is important that you always make payments for your bills on time. This displays good money management habits and an ability to make payments on time, which is important to lenders. It is not to be underestimated how important this is to your overall credit score.

Limit Applying for New Credit Accounts

If you are trying to improve your credit score, it is best if you limit or avoid applying for any new credit cards or loans for the time being. If you are thinking it might improve your ‘credit mix’ it probably won’t, and is more likely to harm your credit score. By creating too many hard inquiries on your credit report you can negatively impact your credit score.

Get Credit Where Due

Most of us make utility and cell phone payments, and this can help improve your credit scoreBy registering for Experian Boost you could see a bump to your FICO score. It should be noted that this is more likely to benefit those with “thin” credit histories. Also, this only affects your  Experian credit file, so if a lender or credit card issuer relies on one of the two other major credit bureaus (Equifax and TransUnion) it probably will not help you to get approved. But it is easy to do or would be worth setting up just the same, because even if it doesn’t help now it is certain to benefit you in the future.

What to Know About Credit Scores 

Your credit score is calculated based on your payment history, debt owed, length of credit history, new credit and credit mix. 

Having a good credit score allows you to improve your lifestyle by making purchases that might only be possible with credit, along with having the resources to cover unexpected expenses or emergencies that can occur.

Your credit score comes from one of the three major credit bureaus; Equifax, Experian or TransUnion. While the number might not be the same with each, it is generally very similar most of the time. 

A credit report typically contains the same types of information:

Personal information – details like your name, date of birth, social security number, current and past addresses, and current and previous employers. 

Trade account information – this includes open credit accounts, available credit limit or past loan amounts, and whether you’ve made your payments on time.

Public Record Information – this can include any information from the courts, such as bankruptcy filings. These can have a negative impact on your credit.

Credit inquiry information – this will include hard inquiries, such as applying for credit or financing. If you prequalify for a loan it is a soft pull (inquiry) but for pre approval it would be a hard inquiry.

While there is no quick fix when it comes to improving your credit score other than disputing any errors on your credit report, building your credit rating is about diligence. You can improve your credit score over time and get the preferred rates and terms those with a good credit score are eligible for with a little work.