How to Repair Credit Score Fast – Best Tips

Credit scores help to determine the creditworthiness of an individual. However, to achieve good scores, you need to practice good usage of your credit card, including timely payment. If you do not use your line of credit as per the guidelines, you are likely to develop bad credit scores. In such a scenario, you have to repair credit score. I will later discuss how to repair credit score fast to help you improve your creditworthiness.

Credit scores are expressed in numbers that range from 300-850, with 300 being the lowest credit score while 850 is the highest. A person with a 300 credit score has very poor credit scores, while 850 represents excellent scores. You may be wondering how the scores came to be. Well, every financial institution has to report credit card usage or loan repayment to the credit bureaus. The credit bureaus refer to various pieces of information to come up with credit scores.

Credit bureaus are agencies entrusted with keeping credit information for borrowers. The bodies use credit card and loan repayment information to calculate your credit scores and prepare a credit report. Your credit report does not contain credit scores whatsoever. It only contains information such as your personal information, loans borrowed, your payment patterns, when you are supposed to finish paying your loans, among other information. That means you can only get credit scores as different entities.

How do credit bureaus calculate credit scores?

Most people wonder how credit bureaus come up with credit scores. The question is, how is the credit score calculated? Well, credit bureaus calculate credit scores by using the following information. Each piece of information carries a particular percentage on the overall credit scores.

i) Payment history

The payment history makes up to 35% of your overall credit scores. It indicates how you have been paying your loans in the past. It gives a general picture of how you are likely going to pay a loan. If you have a good payment history, your credit scores will likely be high due to the large percentage the payment history contributes to your credit scores.

ii) Amounts owed

If you have many unpaid debts, that shows a bit of irresponsibility. Credit card issuers and loan issuers will fear to give you a loan if you have so many unpaid loans. There is a possibility that you will default on a loan if you have so many unpaid debts. The amounts owed contribute up to 30% of your overall credit scores.

However, you should not be confused to think that many credit cards can lower your credit scores. Remember that credit cards give you a line of credit to use. So you only pay what you have utilized. If you have many credit cards and use a little from each that is beneficial to your overall credit scores.

iii) Length of credit history

If you have a lengthy payment history and have been paying loans and lines of credit properly, then that adds 15% of your overall credit scores. However, you can have good credit scores even if you do not have a long credit history. Likewise, you can have poor credit scores even if you have a long credit history.

iv) New credit

New credit harms your credit scores. If you make so many hard inquiries during loan or credit card applications, then your credit scores go down. New credit inquiries affect 10% of your overall credit scores.

v) Credit mix

If you mix various kinds of credits, then you impact your credit scores positively. Credit mix contributes 10% of your overall credit scores. You can mix your credit by having credit cards, mortgage loans, auto loans, student loans, home equities, and so on.

How do I get my credit scores?

Now that you understand how credit scores are calculated and who calculates them, it is good to know how to get your credit scores. Since I mentioned that a credit report does not have credit scores, you must request them separately from the credit bureaus.

A credit report is free, and you are entitled to get one each year from each of the credit bureaus. However, you have to buy credit scores from any of the credit bureaus. You only need an account with the credit bureau of your choice, and you are good to go.

If you have a credit card, you can always check your credit scores online when you log into your credit card account. Also, you can get credit scores for free from Experian and save the few coins that you could have spent when buying credit scores from the credit bureaus.

Can I get a credit card with bad credit scores?

If you have bad credit scores, you can get a credit card from various credit card companies. There are various credit cards for bad credit. However, these credit cards usually have a low credit limit and attract high-interest rates on the amount borrowed. The main aim of using bad credit cards is to build your credit scores.

You can also opt for secured credit cards that are good for people with bad credit scores and those with no credit history at all. Secured credit cards require you to deposit a certain amount of money in your checking account to borrow against it. The more deposits you make, the bigger the line of credit you get. Once you grow your credit scores, your deposit amount will be available in your account for use as you qualify for an unsecured credit card.

How to Repair Credit Score fast

how to repair credit score fast

There are various ways you can repair credit score. They include the following.

1) Get a secured credit card

Secured credit cards are excellent tools to repair your credit scores. If you have lousy credit scores or have no credit history, you can opt for secured credit cards.

2) Pay credit card balances early

Credit card issuers report your credit card usage every month. To ensure that you get high credit scores, you can pay your balances early enough before the reporting date. Remember, your payment patterns determine a lot on how many credit scores you will have.

Make sure that even if you have many credit cards, all the cards are paid for. As I mentioned earlier, your payment history contributes up to 30% of your overall credit scores. You can always put some reminders on your phone to avoid forgetting the payment day.

3) Utilize low amounts of your line of credit

You can have a low utilization ratio of your line of credit. If you use a lot of your line of credit, then you will be showing irresponsibility, and your scores will likely go down. Financial experts recommend that you use at most 30% of your credit limit.

4) Get a higher credit limit.

If your scores grow to qualify you for higher credit limits, you should ask for a higher credit limit. That way, you will have a larger amount of money to spend on your line of credit without affecting your credit utilization ratio. Your credit utilization ratio is very influential to your overall credit scores.

5) Become an authorized user

If you have a relative or a friend who has good credit scores and has a credit card, you can ask them to have your name added as one of the authorized users. The action leads to faster improvement of your credit scores as the concerned financial institution can report as soon as possible. As an authorized user, you get a favorable report on your credit usage, just like the original owner of the credit card.

6) Dispute credit report errors

If you find some errors in your report, such as poorly reported payments, loans you have never taken, loans that you paid but read you have never paid, identity theft, and so on, you can file a dispute to have them rectified. The credit bureaus allow you to dispute credit report errors online. Once resolved, you can easily see a positive impact on your overall scoring.

7) Persuade debt collectors to stop reporting you to credit bureaus

Once you pay all your debts with collection accounts, they may continue reporting you to the credit bureaus. That means your scores will be affected. You can ask them to stop reporting you to the credit bureaus to improve your overall credit scores. If anything, you should try your best to have your name removed from the credit bureaus.

Which credit repair companies can I use to repair my scores?

There are various credit repair companies that you can use to repair credit score to acceptable levels. Among the best credit repair companies are.

  • Credit Saint
  • Sky Blue Credit
  • Ovation Credit Repair
  • The Credit Pros
  • The Credit People
  • Lexington Law Credit Versio

Bottom line

Credit scores indicate the creditworthiness of an individual. They are usually in numerals and range from 300-850, whereby 300 represents the worst scores and 850 represents excellent scores.

You can only attain good credit scores if you practice good credit debt payment behavior. If you have bad credit scores, you can quickly rectify them by using a bad credit card. You can also engage a credit repair company to help you in the credit repair journey.