Some of the most impacting and enduring ways to build your credit score take some time. However, there are some techniques that offer a quick score boost. Realize, though, that some of these tactics may backfire, according to the Fair Isaac Corporation's MyFICO credit resource website.
Dispute Errors and Get Them Fixed
The number one recommended way to quickly boost a score is to check your credit report and make corrections when applicable. Both MyFICO and Forbes recommend this as a first step to a quick fix. Credit reports are known to have errors, and many errors can cost you tens or even hundreds of points on your score. If you see things like incorrectly reported late payments or outstanding balances that you have paid on your report, submit a dispute resolution request through the credit reporting bureau and the agency that reported the information. In most cases, the credit bureau has 30 days to investigate the dispute.
Make Substantial Debt Payments
If you have some free cash, making sizable payments on debt accounts can boost your score significantly. In fact, behind disputing errors, paying down credit card balances is the fastest track to a score spike. Debt balances, especially your ratio of balances to available credit, impact 30 percent of your FICO score, reports MyFICO. Paying down a significant amount of debt on credit cards reduces your credit utilization ratio. If you owe $2,000 on a card with a $4,000 limit, your utilization ratio is 50 percent, a warning flag that you may be overextending yourself. If you make a $1,000 payment, it drops to 25 percent.
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Raise Credit Limits
In addition to or along with paying down debt, try to get creditors to raise your limit on cards. Raising your current limits has a similar impact on lowering your credit utilization ratio. You do have to be careful in gaining access to more credit if you don't have good spending discipline. As you review your credit report, ensure that your actual credit limits are properly reported. Doing so protects against your utilization ratio appearing worse than it should.
Request Rapid Rescore
A rapid rescore is a service offered by many mortgage lenders. With this service, you can ask the lender to rerun your credit after information is adjusted or updated. If you recently resolved a dispute to get a negative item removed or paid off a loan balance, a rapid rescore could create a dramatic boost in your score. Some lenders are reluctant to run a rapid rescore because they have to pay a fee to the reporting bureau. However, an increase of a few points may make the difference in whether a home buyer qualifies for a loan.
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