Your credit score is a vital indicator of your financial health. It’s one of the first (and one of the most crucial) things that credit card companies, banks, and other lenders look at to determine if you’re eligible for financing. It also plays a role in determining your rates and terms.
The better your credit score, the more creditworthy you are. A high score tells creditors that you’re trustworthy — more likely to pay back what you borrow on time. Not only are you more likely to get approved for a credit card or loan, but you’re also more likely to get favorable rates and terms.
On the flip side, having a low credit score tells creditors that you’re less likely to repay what you borrow. Your chances of getting approved for a new loan, mortgage, or credit card are much lower. If you do get approved, you’ll likely have a much higher interest rate.
Low credit happens. A high debt-to-credit ratio, skipped payments, late payments, and defaults on previous loans can all hurt your credit score. Fortunately, bad credit doesn’t have to last forever. There are plenty of innovative solutions that often go overlooked or never get considered. Here are a few unique options for fast credit repair:
1. Become an Authorized User on Another Card
One quick and easy way to give your credit score a boost is to become an authorized user on someone else’s credit card. If you have a friend or family member who makes their payments on time and who’s willing to help you out, have them add you to their account.
Once added, you’ll reap a couple of benefits:
- You’ll increase your available credit, which decreases your debt-to-credit ratio.
- Their timely payments will reflect positively on your history.
Both of these factors can help to achieve credit repair fast.
2. Ask for a Credit Increase
Your debt-to-credit ratio accounts for 30% of your total credit score. When you have large balances on your cards, you have less available credit. The result is a lower score. FICO recommends keeping your debt-to-credit ratio below 30%.
But paying down what you owe without accruing new debts takes time, especially if you only make the minimum payments. A faster way to boost your credit is to speak with your credit card companies and request a credit increase. Even small increases across a few cards will add up and make a significant difference.
Keep in mind that creditors may check your credit report before granting an increase. If you have late payments or high balances, you may be denied. Showing them that you can be responsible with your credit will help you to get what you need.
3. Make Payments Twice a Month
Using too much of your credit reflects poorly on your credit score. Let’s say you put a substantial balance on your credit card for one month. Even if you plan to pay it off by the statement due date, it still looks like you’re nearly maxing out the card. The credit reporting agencies may see the high balance before you submit your payment, causing your credit score to take a hit.
If you can afford it, make two smaller payments during the month. Submit one right before your statement closing date and the second before your payment due date. By doing this, you reduce the balance credit agencies see, so your debt-to-credit ratio doesn’t look as bad.
4. Find Out What Accounts Aren’t Getting Reported
Creditors don’t have to report your payments to credit reporting agencies. Credit card companies, banks, mortgage lenders, and the like always will, but smaller companies might not. This means making timely payments to some creditors won’t help your score.
Take stock of all of your creditors, including your cell phone provider, utility companies, and landlord (if you rent your home), and start making some phone calls. If they’re not reporting your payment history to the credit reporting agencies, ask if they will. Of course, they could say no. If they’re willing to help, though, your on-time payments to these companies can give your credit score a quick boost.
5. Negotiate Accounts in Collections
Skipping too many payments can lead to your creditor sending the account into collections. This will have a devastating impact on your credit score. Leaving it alone won’t do you any favors. Even if you pay it off, it can continue to hurt your score, at least for the short term.
Reach out to the collections agency to make a deal. You’ll pay off your debt in exchange for having them report your account paid as agreed or having them delete it altogether. It’s important to get the agreement in writing. Only make the payment once you have written confirmation of your deal.
6. Sell Your Home
Sell your home? Why would you do such a thing? You’d have to pack up your belongings and find a new place to live, right? Rather than having you move, a sale-leaseback program offers you a unique solution.
With a sale-leaseback, you can sell your home and continue to live there. Selling your home gives you the money to pay off what’s left of your mortgage and use the remaining cash from the sale to pay off other debts. These efforts can help boost your credit score significantly. While selling your house might not be the first option to come to mind, a sale-leaseback solution can help you to access cash quickly, giving you what you need to erase some of your debts and improve your credit.
7. Rapid Rescore
Even if you take all of the necessary steps to repair your credit quickly, it can still take 30 to 45 days before your efforts reflect on your credit report. Reporting agencies don’t require creditors to submit information on a specific schedule. Instead, every creditor sets their own.
Rather than waiting for your new credit scores, you can ask for a rapid rescore. In some cases, creditors such as a mortgage lender can request it on your behalf. Using this method, you can have your new credit score calculated in as little as a few days, which is especially helpful if you’re trying to improve your credit to obtain a better interest rate for a mortgage. If you need the fastest way possible for credit repair, a rapid rescore could be just what you need.
Fast Credit Repair
Repairing your credit score can feel daunting. Luckily, there are several ways to boost your score. Once you start improving your score, keep your new financial habits:
- Make payments on time.
- Maintain a low debt-to-credit ratio.
- Keep old accounts open, even if you don’t use them.
- Request free copies of your credit report once a year. Review them and dispute mistakes immediately.
By maintaining healthy financial habits and keeping an active eye on your credit, you ensure that your credit score is right where you need it.
There are several ways to potentially repair your credit score fast. Talk to a financial expert to decide on a path toward a higher credit score and more secure finances.