A credit score refers to the creditworthiness of an individual. It measures your ability to pay a certain amount of loan. Credit card issuers must pull what we call hard inquiries to know your credit scores once you apply for a credit card. The same applies to loan issuers. Your credit scores dictate the kind of credit card you can get. If you have bad credit scores by any chance, you can raise them within a given time. Today, I will inform you how to get a 720 credit score in 6 months.
When you start rebuilding your credit scores, it can take up to six months to rebuild them. While increasing your credit scores to a certain number after those six months is not guaranteed, you can attain a 720 score if you put seriousness in your credit building program. It is easy to grow credit scores if you follow the proper guidelines from your creditors.
Someone may wonder why a person may have bad credit scores. There are various reasons why someone may find themselves in the bad credit category. The most common one is if you defaulted on a credit card payment or loan. You can also fall in the bad credit category if you kept your credit card dormant or if you used too much of your line of credit.
Who calculates credit scores?
Banks and other financial companies are not concerned with credit score calculation. However, they are legally required to report credit card usage to the credit bureaus. Therefore, credit bureaus are the bodies entrusted with the calculation of credit scores.
There are three credit bureaus in America which include Equifax, TransUnion, and Experian. The three bodies receive similar information from banks and then calculate using the same credit score calculation formula.
Although there might arise slight errors during the reporting by banks, the bureaus usually produce reports that are in agreement. Credit bureaus also come up with your credit report. The report contains detailed information about your credit usage and repayment patterns.
How do I get my credit scores?
You can get your credit scores from the three credit bureaus. You have to create an online account with any credit bureaus to buy credit scores when the need arises. You can also get credit scores for free from your credit card issuer or Credit Karma.
Does a credit report contain credit scores?
The credit report does not contain credit scores. However, it contains details about your loan repayment patterns, when you took the loan, the amount you took, and how you are expected to repay the debt. The report also contains your details, such as your full names and your identification details.
Every American citizen is entitled to one credit report every year. You can decide to pick all three reports at once or get them at separate times of the year.
How do I increase my credit scores?
You can increase your credit scores in various ways. They include the following.
i) Get a secured credit card
You can obtain a secured credit card and begin growing your credit scores. Secured credit cards require you to deposit some money to act as security as you continue using your credit card. If you can’t pay back your credit card debt, your card issuer uses the deposit to recover their money.
Secured credit cards attract little interest compared to unsecured credit cards for bad credit. That is because the card issuer sees no significant risk when issuing you the card due to the deposit amount. Someone may ask a question like, how long does it take to build credit with a secured credit card? Well, the time taken to rebuild your credit score varies from one person to another, depending on your card usage. If you use your card responsibly, you are likely going to see significant changes with time.
ii) Pay your debts at the right time
Credit card issuers usually require you to repay your loan after every month. Depending on your agreement with the card issuer, you should pay the money on the correct date you agreed with them. Remember that credit card issuers are humans too. Therefore, if you cannot pay your credit card debt on the correct date, be courageous enough to call them and explain when you can get the funds. That way, you will prevent them from reporting you to the credit bureaus.
iii) Practice low line of credit utilization
Every credit card has a limit whereby you cannot borrow more than that. It is advisable not to spend all your credit. Experts usually suggest that you should use at most 30% of your credit limit. That way, you will be able to gain good scores.
iv) Mix your credit
As I said earlier, you can mix credits and increase your credit scores. Credit mix can help you grow your credit scores to 720 if you make payments as per the agreements. If you get various credit cards and utilize less than 30%. You can quickly grow your credit scores to substantial amounts.
v) Keep your credit cards active.
Some people take credit cards only to file them on the shelf. That is not advisable. You should keep the credit card account active all the time. Even if you do not need to spend with the card, make sure you spend a little of your credit card limit.
Also, never close your credit accounts. Closing your credit accounts means that some of your credit histories will be lost, thus your credit scores.
How to get a 720 credit score in 6 months?
I have just explained how you can raise your credit scores using your credit card. However, if you want to get a 720 credit score in 6 months, you have to put in an extra effort. The following are ways to increase your credit scores to the above number within six months.
1) Dispute credit report errors
If your credit report has errors of loans and lines of credit that you never used, you will likely have low credit scores. Errors of loans that you never took can bring you down. However, if you settle down such errors, your credit scores will likely shoot up to where you belong.
2) Get a credit repair company
A credit repair company will follow up very keenly to ensure that everything about your credit report is correct. They will make sure that they dispute all credit errors and advise accordingly on what you should do. Credit repair companies require you to pay a particular amount of service fee. Various repair companies can assist you in the credit repair process, including Credit Saint, Sky Blue Credit, and The Credit People, among others.
3) Credit mix
Credit mix is known to work well if you repay all the debts as per the agreement with your creditors. If you take mortgage loans, personal loans, auto loans, student loans, equity loans, and credit cards, then you will be in a position to increase your credit scores rapidly. Remember that having many credits requires you to be very keen on the repayment schedule, or they may turn disastrous to your overall credit scores.
4) Work closely with debt collectors
When your credit card issuers fail to recover their money from you, they forward your name to the debt collectors. Debt collectors are companies that collect debts on behalf of the creditors. They do all they can to recover their money. If your name is with the debt collectors, you should make an effort to repay the loan. If you can clear with the debt collectors, you can better grow your credit scores.
5) Consider a secured credit card.
There up, I mentioned that you could easily get a secured credit card to help you build a credit score. A secured credit card allows you to build credit scores faster if you utilize it properly. Afterward, you can request an unsecured credit card if your score rises to qualify for one.
6) Become an authorized user
If you have a relative who has good credit scores, you can ask them to allow you to become an authorized user. When using their credit cards, you will eventually gain high credit scores. If you get someone with good (670-799) or excellent credit scores (800-850), then you are good to go.
How much can I borrow with a good credit card?
A good credit score ranges between 670-799. With such credit scores, you can get credit cards with higher limits and low-interest rates. But how much can I borrow with a 700 credit score? The amount may not be the same with all the credit card issuers, but it must be an impressive limit so that even if you spend below 30%, you will still be okay.
Credit scores indicate the creditworthiness of an individual, and you can get credit scores when you get a loan or credit card. Credit bureaus are the bodies responsible for calculating 720 credit score in 6 months as well as compiling credit reports. A credit report does not have credit scores, and thus you have to purchase scores from the credit bureaus or get them for free from Credit Karma.