When you need to take out a loan, the lending company will surely check your credit score. If you score below 760, you can kiss your loan goodbye. You need to have a good credit score to be able to get loans at better rates. Therefore, if you know your credit score does not measure up and yet you need a loan to take care of your bills, you should start doing some repairs fast. Here are some of the quick ways you can repair your credit:
Get a credit card
If you do not already have one, you should get a credit card. Do not believe the popular opinion that you must have a balance to obtain a good credit score. Nevertheless, having one or two cards will contribute to a good score. If you are unable to obtain a regular card, you can go for the secured card. Ensure your card reports to the three credit bureaus.
Pay off your credit card
It is true that paying down your installment loans such as mortgage, auto and student loans will help your score but not as significant as paying down your revolving accounts such as your credit card. Many lenders like to see you have a huge gap between the available credit limit and the amount you are using up. Start by paying off cards that are closest to the limit.
Use the credit card lightly
Even if you pay all your bills by the end of the month, accumulating big balances will affect your credit score. Increase your score by limiting the charges to less than 30% of your card's limit. You can set up a text or email alert with the credit card company to let you know when you are approaching the limit you have set.
Use old cards
The older the credit is the better. Nevertheless, if you cease using some of your old ones, the credit company may cease updating the bureaus or close the account all together. Even though the account may still show in the credit information, it will not have as much weight as your active accounts during the calculation process. Hence, you should consider charging a recurring bill to that old card you have not used in a while. Alternatively, you can take you family out for a move or dinner. Just do not forget to pay the off your balance in full.
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