Most people today do not have perfect credit. In fact, people typically have average credit at best. They have made mistakes in the past.
It is possible they may have missed payments, or perhaps they have too many outstanding credit cards and loans, something that will cause your credit score to diminish.
There are ways of resolving low credit scores.
One way is to find a trustworthy credit repair expert to help you. However, if you would prefer, you can do a few things on your own that can gradually begin to improve their credit rating.
Let’s look at five of the top strategies that people can use to boost their credit score to a much higher level.
Apply for a Secured Credit Card
Although this is an option that is typically used by those that have recently gone through a bankruptcy, it can be used by virtually anyone trying to improve their credit.
A secured credit card is simply a credit card that has a balance based upon the amount of money that you have deposited on the card. You will simply make payments with this credit card as you would any other.
The key to benefiting from a secured credit card is to pay it off by the end of the month. By showing that you can make regular payments, this can help build your credit score very quickly.
It is recommended that you use this card for purchases for at least a year to see positive results.
Find Someone to Cosign on a Loan
Although this is an option that may not be available to everyone, it is one of the fastest ways to improve your credit almost instantly. When someone co-signs on a loan that you take out, your credit score is combined with theirs.
The reason that many people choose not to provide this option for friends or family members is twofold. First of all, this could cause their credit score to go down. Second, if you miss any payments, this will be reflected on their credit score, and that is why many people will not do this for people, even if they know them very well.
Get Credit for Bills You Are Currently Paying
If you are making regular payments on your house payment, and you are doing so regularly, you may want to have a company add this to your credit report.
You can work with what are called rent reporting services that will place this on your credit score for you.
This will help you establish your credit the quickly, especially since this is a very large amount of money that you are making payments on every month. This should only be done if you are sure you can make your payments regularly, and if so, this can be a fast way to improve your credit score.
Become an Authorized User on Another Person’s Credit Card
This strategy is a little harder to pull off because not too many people would be willing to have someone else on their card as another user. But if you are married to someone with good credit or if a parent would be willing to do this for you, then it’s worth pursuing.
This approach is very similar to having someone cosign on a loan.
The primary difference is that you are simply added as an authorized user on a credit card that someone else is using.
Not only will you have access to this credit card for making purchases, but you will benefit from all the on-time payments that are made on this credit card by you or them. It is important to find out first if this is going to be reported to credit bureaus.
If it is, this will help you build your credit consistently. If not, you will need to find someone that does have a card where regular reporting is done to credit bureaus every time that they are making a payment.
Apply for a Credit Builder Loan
There are lending institutions that specifically offer credit builder loans. They will allow you to borrow money, and as you make your payments, this is reported to the credit bureaus.
Similar to adding yourself to another person’s credit card, the information that is reported can help you build your credit very quickly. Local community banks and credit unions offer these types of loans.
You may have to do research online to find the specific companies. As long as you are making your payments on time, this is going to improve your credit report substantially. Conversely, it can negatively affect your credit score if you start to make late payments.
So be sure you have to money at the end of the month to make the necessary payments. Otherwise, everything will backfire, and your credit score will decline instead of improving.
Start Improving Your Credit Today…
These are just a few ideas that you should consider if you would like to improve your current credit score. It may take you a year or more to see a substantial change. However, consistency is the key to making sure that your credit score continues to rise.
By making on-time payments with every credit card that you have, as well as any other payments that you are making, you are going to see a steady improvement on your credit score by making responsible on-time payments. You may also want to consider working with a company that can help you improve your credit rating.
This will cost money, but it is a very easy way to start improving your credit score using their services. If you would like to apply for a home loan next year, or even just a credit card, you now know how to boost your credit score using these strategies.