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How to Increase Credit Score, In a Short Period of Time

Updated on August 21, 2010

We are starting this discussion under the impression that your credit score is, at the moment, deplorably low. So you are looking for ways to raise it to a decent level. A level which can allow conservative lenders (who are the majority nowadays) to lend you money. A level which can allow you to access reasonable interest rates on money you borrow.

One thing you have to know

One of the most important things you have to know, as you set out to find out how to increase credit score, is that the score is not lifelong. You may have a low credit score, but it is not permanent. There are things you can do to improve it. We are saying this because there are those of us who live under the impression that the fact that their credit score is low means that they are 'messed up for life.' That it is label they will always live with: a label to the effect that they are not creditworthy. Nothing could be further from the truth. Granted, improving your credit score will take some work and (especially) discipline on your part. But it can be done, and others have done it. The truth of the matter is that a considerable percentage of people asking how to increase credit score have another question at the back of their minds, as to whether, in the first place, it is possible to increase credit score. And the answer, as we have said is YES: it is possible to increase credit score.

Now one of the keys to improved credit score would be a demonstration that ‘you have changed your ways’ and you are now creditworthy. This is the impression you will be looking to create in all your efforts aimed at improving your credit score. It is the only way you can improve the credit score, anyway. One way to do this would be by taking a small loan, and then servicing it in a timely manner. The credit bureaus will, of course, take note of your initiation of the borrowing relationship, and your timely repayment of the debt – and will reward you with a good credit score. it may not reflect immediately, but it surely will, by and by. Better still, you can take a series of these small loans and repay them in a timely fashion. But beware that in doing this, you won’t be attempting to create a 'false impression.' You will also be learning how to service debts in timely fashions. It is unthinkable that upon improving your credit score in this admittedly tedious way, you would go ahead to mess it up again by taking loans and failing to repay in good time!

You will also consider minimizing the numbers of times your credit score is requested by potential lenders (because each request translates to a [small] decrease in the score).This is about only applying for credit facilities you need and you feel that you are likely to qualify for, whilst also pooling the applications, so that the credit score requests made on account of them are received by the credit beaurau in one transaction, and treated as one (meaning only one deduction in your credit score).

Utility companies are also amongst the sources credit bureaus make reference to, in working out people’s credit scores. The moral here is that you need to ensure timely repayment of your utility bills, in order to improve your credit score. In other words, out of your total credit score, there is an element that is constituted by utility bills – and while that component may be small, it can make the difference between your reaching a certain lender’s cut-off and not reaching the same. If you are trying to improve your credit score, and you are delaying in your payment of utility bills, then clearly, you are sabotaging your efforts.

Contrary to what many of us imagine, the thing to do towards improving credit scores is not to give up credit cards, but rather to make responsible use of them. This is about maintaining low balances, avoiding maxing them, repaying balances in good time (so that we don’t get to the point where we have to be penalized) and so on. Do this consistently for some time, and watch the impact it has on your credit score figure. At first, you may not see any change, but as time progresses, you start seeing the numbers changing in the direction you want.

Credit Score Poll

How high is your credit score, at the moment

See results

Typical Credit Scores (data borrowed)

Credit Score
Percentage of people with it (in a particular sample)
 
300-499
45%
 
500-699
52%
 
700-850
3%
 

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