The Credit Challenge

If you are looking to improve your credit report scores quickly, now is the time to get started. With the way the market is going, there’s no telling where the requirements for obtaining financing is going. We have gone from needing little credit for obtaining 100% financing on homes to having near-perfect credit report scores and still not qualifying for a mortgage.

With this in mind, here are some great strategies you can utilize right away to jump start your credit report scores.

1. Create Some Balance: While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit report scores, paying down or paying off revolving debt, such as credit cards, can cause a quick jump in your score on your credit report. The trick is to get and keep your balances below 30% of your credit limit on each card.

For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts as it may drop your credit report scores since you are eliminating a trade line from your credit profile. Canceling those cards may inadvertently undo all of your hard work.

2. Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances and drastically drag down your credit report scores.

Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits on your credit report if you ask them in writing.

3. Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don’t report your information to all three credit companies – this is why credit report scores often vary between bureaus.

If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your scores on your credit report. Also, if you’re in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no.

4. Protect Your Interests: Your credit is calculated based solely on the information available to your creditors. If you have a Home Equity Line of Credit, make sure it’s listed as a mortgage or an installment account on your credit reports and not a revolving debt. This alone can boost your credit report scores, because it will not appear as a revolving account with a high balance.

If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported correctly, that is with a zero balance. This action could increase your score by 50 to 100 points. Because simple mistakes like these can wreak havoc on your credit report scores, it’s important to monitor your credit every four to six months.

5. Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. For the fastest results, visit the appropriate credit bureau’s website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail. Just working out these corrections will automatically increase your credit report scores without spending any money on lowering your other expenses.

Take these tips and be sure to put them to use.  As you can see, it isn’t very difficult to boost your credit report scores anywhere from 20-100 points within a couple weeks.