How to Get a Better Credit Score Quickly
by Brandon Cornett
A good credit score is the first step to getting a mortgage loan. It's not the only thing lenders will look at, but it is one of the most important criteria for qualification. So if your score is low, you need to get a better credit score before applying for a home loan. This will make it easier to get approved for the loan, and it will also help you qualify for a better interest rate on the mortgage.
Step 1 - Get Your Current Credit Score
This step is for those of you who have not yet received your credit scores from all three of the reporting bureaus (Experian, Equifax and TransUnion). If you've already done this, then proceed to the next step. Otherwise, use the white box at the top of this blog to request your scores from all three of the reporting agencies. After all, you might find that you don't even need a better credit score, and that it's already in the excellent range. But you won't know until you receive it.
You can learn more about requesting your credit score online in this article:
www.cornettcommunications.com/credit-score.php
Step 2 - Get Copies of Your Free Credit Reports
If you use the Credit.com link at the top of this blog to request your credit scores, you'll get your credit reports at the same time. Yes, they are two different things. You can also get free copies of your reports through AnnualCreditReport.com (which is the only website endorsed by the FTC, by the way).
Step 3 - Correct Any Errors On Your Reports
I wish I could say that the credit reporting agencies rarely make mistakes, and that the majority of the reports they produce are error-free. But this is simply not the case. In fact, some studies have found that the majority of consumer credit reports have one or more mistakes in them. So in order to get a better credit score, you must start by checking your reports for errors, and fixing those errors if necessary. The Home Buying Institute has a good tutorial that explains how to fix errors on your credit reports.
Step 4 - Reduce Your Credit Card Balances
Credit utilization is one of the top-three factors that determine your score. This is a percentage that indicates how much of your current credit limit you are using. For example, if your credit card balance is only 10% of your available limit, then you have a fairly low utilization ratio. This is a good thing, because it shows you're using your credit responsibly. On other hand, if you're using 95% of your credit limit (nearly maxed out), it will have a negative impact on your score. So reducing your balances is one of the things you can do to get a better credit score quickly.
Step 5 - Pay All of Your Bills on Time
You've heard this one before, I know. But there's a good reason this piece of advice is repeated so often. The reason is this. Your account history (how you pay your bills) accounts for 35% of your overall credit score, which is more than any other single factor. So if you have a history of missed payments, you can earn a better credit score by paying on time from here on out.
Step 6 - Avoid Credit Repair Companies
You've probably seen advertisements online for the so-called credit repair services. Let me offer the following advice on this subject. You should avoid these companies entirely. Most of them are scams, and they cannot do anything that you can't do for yourself (and for free). Not convinced? Try this. Do a Google search for the phrases "credit repair companies" and skim through the first two pages of results. You'll see all kinds of information about credit repair scams, ripoff advisories, government sting operations and more.
Steps #4 and #5 above are the fastest ways to improve your score. When you do these two things in tandem -- reducing your credit card balances and paying your bills on time -- you'll see noticeable improvements in no time at all.
Some people make this more complicated than it really is. Credit repair companies in particular will tell you that it requires special skills and knowledge. But this is simply not the case. Getting a better credit score is one of the most straightforward topics within the realm of personal finance. And I've just given you the six steps needed for success.
About the Author: Brandon Cornett is the creator of the Home Buying Institute and several other consumer-education websites, including The Agent Network.
A good credit score is the first step to getting a mortgage loan. It's not the only thing lenders will look at, but it is one of the most important criteria for qualification. So if your score is low, you need to get a better credit score before applying for a home loan. This will make it easier to get approved for the loan, and it will also help you qualify for a better interest rate on the mortgage.
Step 1 - Get Your Current Credit Score
This step is for those of you who have not yet received your credit scores from all three of the reporting bureaus (Experian, Equifax and TransUnion). If you've already done this, then proceed to the next step. Otherwise, use the white box at the top of this blog to request your scores from all three of the reporting agencies. After all, you might find that you don't even need a better credit score, and that it's already in the excellent range. But you won't know until you receive it.
You can learn more about requesting your credit score online in this article:
www.cornettcommunications.com/credit-score.php
Step 2 - Get Copies of Your Free Credit Reports
If you use the Credit.com link at the top of this blog to request your credit scores, you'll get your credit reports at the same time. Yes, they are two different things. You can also get free copies of your reports through AnnualCreditReport.com (which is the only website endorsed by the FTC, by the way).
Step 3 - Correct Any Errors On Your Reports
I wish I could say that the credit reporting agencies rarely make mistakes, and that the majority of the reports they produce are error-free. But this is simply not the case. In fact, some studies have found that the majority of consumer credit reports have one or more mistakes in them. So in order to get a better credit score, you must start by checking your reports for errors, and fixing those errors if necessary. The Home Buying Institute has a good tutorial that explains how to fix errors on your credit reports.
Step 4 - Reduce Your Credit Card Balances
Credit utilization is one of the top-three factors that determine your score. This is a percentage that indicates how much of your current credit limit you are using. For example, if your credit card balance is only 10% of your available limit, then you have a fairly low utilization ratio. This is a good thing, because it shows you're using your credit responsibly. On other hand, if you're using 95% of your credit limit (nearly maxed out), it will have a negative impact on your score. So reducing your balances is one of the things you can do to get a better credit score quickly.
Step 5 - Pay All of Your Bills on Time
You've heard this one before, I know. But there's a good reason this piece of advice is repeated so often. The reason is this. Your account history (how you pay your bills) accounts for 35% of your overall credit score, which is more than any other single factor. So if you have a history of missed payments, you can earn a better credit score by paying on time from here on out.
Step 6 - Avoid Credit Repair Companies
You've probably seen advertisements online for the so-called credit repair services. Let me offer the following advice on this subject. You should avoid these companies entirely. Most of them are scams, and they cannot do anything that you can't do for yourself (and for free). Not convinced? Try this. Do a Google search for the phrases "credit repair companies" and skim through the first two pages of results. You'll see all kinds of information about credit repair scams, ripoff advisories, government sting operations and more.
Better Credit Quickly - Items #4 and #5
Steps #4 and #5 above are the fastest ways to improve your score. When you do these two things in tandem -- reducing your credit card balances and paying your bills on time -- you'll see noticeable improvements in no time at all.
Some people make this more complicated than it really is. Credit repair companies in particular will tell you that it requires special skills and knowledge. But this is simply not the case. Getting a better credit score is one of the most straightforward topics within the realm of personal finance. And I've just given you the six steps needed for success.
About the Author: Brandon Cornett is the creator of the Home Buying Institute and several other consumer-education websites, including The Agent Network.
Labels: credit
posted by Brandon at
9:28 AM
